INSMED RESPONDS TO COMPLAINT FILED BY TERCICA

Insmed Incorporated (Nasdaq: INSM): On December 06,2005, Tercica Inc. filed a lawsuit in the U.S. District Court for theNorthern District of California against Insmed Incorporated allegingdeceptive promotional statements and unfair business practices relatedto Tercica's product, Increlex(TM). The complaint alleges that Insmed has publicly disseminatedunlawful information in violation of the California Business andProfessions Code and the Federal Lanham Act. Tercica is requestinginjunctive and monetary relief.

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