Insmed, Inc. (NASDAQ:INSM)

On Friday Insmed opened at 5.5 on word that the FDA was lifting the clinical hold on the phase III trial of Arikace for non-tuberculous mycobacterial infection. The company' statements about the phase III trial for Arikace in cystic fibrosis have been conflicting.

In the last earnings statement in November the company wrote "Insmed was informed during further dialogue with the Agency that, if the Company chooses to proceed, the required 9-month dog inhalation toxicity study of ARIKACE can be conducted in parallel with the CF phase 3 clinical trials in human subjects".

On Friday when they announced the release of Arikace for NTM they wrote "We are initiating the work required to begin the 9-month dog study during the second quarter and are continuing our dialogue with FDA regarding the CF clinical program."

I do believe that the company will soon report they are resuming both phase III studies, and the share price will return to the high 5 range. Of course, it's anyone's guess what will happen with the dog study or what other adverse events might occur so this is a short-term play and only in CAPS.

UPDATE 2-FDA lifts hold on Insmed's lung disease drug, shares jump