Insmed Incorporated's Capital Efficiency Compared to Peers

• Insmed Incorporated (NASDAQ:INSM) has a Return on Invested Capital (ROIC) of -46.16%, significantly lower than its Weighted Average Cost of Capital (WACC) of 10.76%, indicating inefficient capital utilization.
• Amicus Therapeutics (NASDAQ:FOLD) shows a more favorable position with a ROIC of 7.53% and a WACC of 7.87%, nearly covering its cost of capital.
• Halozyme Therapeutics (NASDAQ:HALO) stands out with a ROIC of 22.84% and a WACC of 9.26%, suggesting efficient capital utilization and making it an attractive prospect for investors.

Insmed Incorporated (NASDAQ:INSM) is a biopharmaceutical company focused on developing therapies for rare diseases. The company's financial performance is often compared to its peers to gauge its efficiency in utilizing capital. A key metric in this analysis is the Return on Invested Capital (ROIC) compared to the Weighted Average Cost of Capital (WACC). This comparison helps investors understand if the company is generating returns above its cost of capital.

Insmed's ROIC is -46.16%, which is significantly lower than its WACC of 10.76%. This results in a ROIC to WACC ratio of -4.29, indicating that Insmed is not generating sufficient returns to cover its cost of capital. This is a red flag for investors, as it suggests inefficient capital utilization. In contrast, Amicus Therapeutics (FOLD) has a positive ROIC of 7.53% and a WACC of 7.87%, resulting in a ROIC to WACC ratio of 0.96. This shows that Amicus is nearly covering its cost of capital, which is a more favorable position.

Cytokinetics (NASDAQ:CYTK) and PTC Therapeutics (NASDAQ:PTCT) also show negative ROICs of -42.98% and -21.21%, respectively, with WACCs of 9.06% and 10.18%. Their ROIC to WACC ratios are -4.75 and -2.08, respectively, indicating similar challenges in generating returns above their cost of capital. Ultragenyx Pharmaceutical (NASDAQ:RARE) has a ROIC of -45.95% and a WACC of 8.94%, resulting in a ROIC to WACC ratio of -5.14, which is even less favorable than Insmed's.

Halozyme Therapeutics (NASDAQ:HALO) stands out with a ROIC of 22.84% and a WACC of 9.26%, leading to a ROIC to WACC ratio of 2.47. This indicates that Halozyme is generating returns significantly above its cost of capital, suggesting efficient capital utilization. This makes Halozyme an attractive prospect for investors looking for companies with strong capital efficiency.