Shares of Insmed plunged after the tiny biotech company said it will restructure operations due to recently settled litigation with rival Tercica, which will keep Insmed's treatment for short stature in children off the U.S. market.
Insmed said Wednesday it will eliminate its sales and marketing group and decrease production at its manufacturing facility in Colorado. Insmed expects to decrease its number of employees by about one third.
Also Wednesday, Tercica and partner Genentech agreed to settle its patent infringement suits against Insmed in the United States and UK, according to an Insmed release.
Following the settlement, Insmed will no longer be able to sell Iplex, a drug used for treating children with growth problems, in the U.S. for severe Primary IGF-1 Deficiency.
Insmed will also withdraw the marketing authorization of Iplex for severe primary IGF-1 deficiency in the European Union.