The little-known company is laying off workers and cutting back production in the wake of a settlement of a patent lawsuit, which was brought by Genentech and Tercica, over a drug used to stimulate growth in abnormally short children.

Only 6,000 children ikn the US suffer from this growth deficiency, but some doctors were worried Iplex would be withdrawn from the market altogether, because it may be useful in treating other maladies, such as Lou Gehrig’s disease and adult muscular dystrophy.

Under the terms, Insmed will now market its drug only for other uses, but will share in profits of a development deal with the other companies. Meanwhile, about one-third of Insmed’s employees are losing their jobs. Insmed shares are plunging today, while Tercica stock is soaring.

You can read more here:

The Associated Press;
Bloomberg News;
The New York Times;
Insmed statement on restructuring;
Insmed statement on the settlment.
The New York Times (a good feature story from last month).

[tags]Genentech, Insmed, Tercica[/tags]