Insmed Incorporated (NASDAQ:INSM) is a biopharmaceutical company focused on developing therapies for patients with serious and rare diseases. The company's primary activities include research, development, and commercialization of novel therapeutics. In the competitive landscape, Insmed faces peers like Amicus Therapeutics, Cytokinetics, PTC Therapeutics, Ultragenyx Pharmaceutical, and Halozyme Therapeutics.
Insmed's Return on Invested Capital (ROIC) is -46.16%, while its Weighted Average Cost of Capital (WACC) is 9.98%. This results in a ROIC to WACC ratio of -4.63, indicating that Insmed is not generating returns that exceed its cost of capital. This inefficiency in capital utilization is a concern for investors, as it suggests the company is not effectively using its resources to generate profits.
In comparison, Amicus Therapeutics has a ROIC of 7.53% and a WACC of 7.56%, resulting in a ROIC to WACC ratio of 0.996. This indicates that Amicus is nearly breaking even in terms of generating returns relative to its cost of capital. While not highly efficient, it is in a better position than Insmed in terms of capital utilization.
Cytokinetics, with a ROIC of -38.41% and a WACC of 7.97%, has a ROIC to WACC ratio of -4.82. This is similar to Insmed, as both companies show inefficiencies in generating returns above their cost of capital. PTC Therapeutics also has a negative ROIC of -11.12% and a WACC of 6.53%, resulting in a less negative ROIC to WACC ratio of -1.70 compared to Insmed and Cytokinetics.
Ultragenyx Pharmaceutical's ROIC is -45.95% with a WACC of 8.61%, leading to a ROIC to WACC ratio of -5.34. This is close to Insmed's figures, indicating similar challenges in generating returns above the cost of capital. In contrast, Halozyme Therapeutics stands out with a positive ROIC of 22.84% and a WACC of 8.97%, resulting in a ROIC to WACC ratio of 2.55. This demonstrates strong capital efficiency and the ability to generate substantial returns above its cost of capital, making Halozyme a standout among its peers.
