—$500 million secured in non-dilutive
structured financings consisting of a term loan and capped royalty
financing—
—$275 million underwritten offering of common
stock—
—Financings increase cash and cash equivalents
and marketable securities to approximately $1.3 billion—
BRIDGEWATER, N.J., Oct. 19,
2022 /PRNewswire/ -- Insmed Incorporated (Nasdaq:
INSM), a global biopharmaceutical company on a mission to transform
the lives of patients with serious and rare diseases, today
announced three strategic financings resulting in aggregate gross
proceeds of $775 million. Proceeds
from the transactions will strengthen Insmed's financial position,
which will place the Company in a position to deliver clinical data
from each of its four pillars.
"Insmed is at a pivotal moment in its history, as we prepare to
serve significantly more patients with serious and rare diseases.
We believe these financings provide the company with ample
resources to advance our four pillars through key clinical trials
and prepare for the potential commercial availability of ARIKAYCE
for frontline NTM lung disease and brensocatib for bronchiectasis,"
commented Will Lewis, Chair and Chief Executive Officer of
Insmed. "We appreciate the extensive due diligence completed by the
investors involved and share their enthusiasm for the Insmed
pipeline and our vision for the future."
"We are excited to partner with Insmed as it advances its
mission," said Pedro Gonzalez de
Cosio, CEO of Pharmakon Advisors, LP. "Led by a highly
experienced management team, Insmed strives to improve the lives of
patients suffering from debilitating diseases and is investing
meaningfully in additional therapies which address significant
unmet needs."
"This partnership exemplifies our collective confidence in the
strength of Insmed's global ARIKAYCE franchise and the potential of
brensocatib to address neutrophil-driven diseases," said
Matthew Rizzo, General Partner of
OrbiMed. "We are pleased to support Insmed as the Company advances
its rare disease pipeline."
$350 Million Senior Secured
Loan
Insmed has entered into a $350
million senior secured term loan agreement with funds
managed by Pharmakon Advisors, LP, a leading investor in
non-dilutive debt for the life sciences industry and the investment
manager of the BioPharma Credit funds (the "Term Loan"). The
five-year Term Loan matures in October
2027. The Term Loan bears interest at a rate based upon the
secured overnight financing rate (SOFR), subject to a SOFR floor of
2.5%, in addition to a margin of 7.75% per annum.
$150 Million Synthetic Royalty
Financing Agreement
The Company has also entered into a
$150 million secured royalty
financing agreement with OrbiMed, a leading investor in the
healthcare industry. Under the agreement, OrbiMed will be entitled
to receive royalties of 4% on global net sales of ARIKAYCE®
(amikacin liposome inhalation suspension) until September 1, 2025, and royalties of 4.5% on
ARIKAYCE global net sales from September 1,
2025, as well as royalties of 0.75% on brensocatib global
net sales (the "Royalty Financing"). The total royalty payable by
Insmed to OrbiMed is capped at 1.8x of the purchase price up to a
maximum of 1.9x of the purchase price under certain conditions.
The Term Loan and the Royalty Financing will be secured by an
all-assets collateral package that is governed by the terms of an
intercreditor agreement entered into among BioPharma Credit PLC, as
collateral agent, OrbiMed Royalty & Credit Opportunities IV, LP
and Insmed.
Transactions for both the Term Loan and Royalty Financing closed
on October 19, 2022.
Advisors
SVB Securities LLC acted as an exclusive
financial advisor to Insmed on the Term Loan and Royalty
Financing. Covington & Burling LLP acted as counsel to
Insmed on the Term Loan and Royalty Financing. Akin Gump
Strauss Hauer & Feld LLP acted as counsel to Pharmakon
Advisors, LP on the Term Loan. Morrison & Foerster LLP acted as
counsel to OrbiMed on the Royalty Financing.
$275 Million Underwritten
Offering of Common Stock
Additionally, Insmed announced
today that it has agreed to sell 13,750,000 shares of its
common stock at a price per share of $20.00 in an underwritten offering (the
"Offering"). Insmed anticipates gross proceeds from the Offering to
be approximately $275 million, before
deducting underwriting discounts and commissions and other offering
expenses. The Offering is expected to close on October 21, 2022, subject to customary closing
conditions.
J.P. Morgan Securities LLC and SVB Securities LLC are acting as
joint book-running managers for the Offering.
Insmed intends to use net proceeds from the Term Loan, the
Royalty Financing and the Offering to fund activities related to
the commercialization of ARIKAYCE, potential commercial launch of
brensocatib, if approved, and further research and development of
ARIKAYCE, brensocatib, TPIP, its translational medicine efforts or
any of its product candidates, and for other general corporate
purposes, including business expansion activities.
The Offering is being made pursuant to Insmed's shelf
registration statement on Form S-3 (File No. 333-238560) that was
previously filed with the Securities and Exchange Commission
("SEC") and became automatically effective on May 21, 2020. A final prospectus supplement and
accompanying prospectus relating to the Offering will be filed with
the SEC and will be available on the SEC's website located at
http://www.sec.gov. Copies of the final prospectus supplement and
accompanying prospectus may be obtained, when available, from: J.P.
Morgan Securities LLC, Attention: Broadridge Financial Solutions,
1155 Long Island Avenue, Edgewood,
NY 11717, by telephone at (866) 803-9204 or by email at
prospectus-eq_fi@jpmorgan.com; or SVB Securities LLC, Attention:
Syndicate Department, 53 State Street, 40th Floor, Boston, Massachusetts 02109, by telephone at
(800) 808-7525, ext. 6105, or by email at
syndicate@svbsecurities.com.
This press release shall not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any sale of
these securities in any jurisdiction in which such an offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such
jurisdiction.
About Insmed
Insmed Incorporated is a global
biopharmaceutical company on a mission to transform the lives of
patients with serious and rare diseases. Insmed's first commercial
product is a first-in-disease therapy approved in the United States, Europe, and Japan to treat a chronic, debilitating lung
disease. The Company is also progressing a robust pipeline of
investigational therapies targeting areas of serious unmet need,
including neutrophil-mediated inflammatory diseases and rare
pulmonary disorders. Insmed is headquartered in Bridgewater, New Jersey, with a footprint
across Europe and in Japan. For more information, visit
www.insmed.com.
About Pharmakon Advisors
Pharmakon Advisors, LP is a leading investor in non-dilutive debt
for the life sciences industry and is the investment manager of the
BioPharma Credit funds. Established in 2009, funds managed by
Pharmakon Advisors have committed $6.5
billion across 46 investments.
About OrbiMed
OrbiMed is a leading healthcare investment firm, with approximately
$18 billion in assets under
management. OrbiMed invests globally across the healthcare
industry, from start-ups to large multinational corporations,
through a range of private equity funds, public equity funds, and
royalty/credit funds. OrbiMed seeks to be a capital provider of
choice, providing tailored financing solutions and extensive global
team resources to help build world-class healthcare companies.
OrbiMed's team of over 130 professionals is based in New York City, San
Francisco, Shanghai,
Hong Kong, Mumbai, Herzliya, and other key global
markets. www.orbimed.com
Forward-looking Statements
This press release contains forward-looking statements that
involve substantial risks and uncertainties. "Forward-looking
statements," as that term is defined in the Private Securities
Litigation Reform Act of 1995, are statements that are not
historical facts and involve a number of risks and uncertainties.
Words herein such as "may," "will," "should," "could," "would,"
"expects," "plans," "anticipates," "believes," "estimates,"
"projects," "predicts," "intends," "potential," "continues," and
similar expressions (as well as other words or expressions
referencing future events, conditions or circumstances) may
identify forward-looking statements.
The forward-looking statements in this press release are based
upon the Company's current expectations and beliefs, and involve
known and unknown risks, uncertainties and other factors, which may
cause the Company's actual results, performance and achievements
and the timing of certain events to differ materially from the
results, performance, achievements or timings discussed, projected,
anticipated or indicated in any forward-looking statements. Such
risks, uncertainties and other factors include, among others, the
following: the risks and uncertainties associated with, and the
perceived benefits of, the Term Loan and the Royalty Financing,
including the Company's ability to maintain compliance with the
covenants in the agreements for the Term Loan and Royalty Financing
and the impact of the restrictions on the Company's operations
under these agreements; the risks and uncertainties associated with
market conditions and the satisfaction of customary closing
conditions related to the Offering; uncertainties regarding the
Company's cash runway; failure to obtain, or delays in obtaining,
regulatory approvals for ARIKAYCE outside the U.S., Europe or Japan, or for the Company's product candidates
in the U.S., Europe, Japan or other markets,
including separate regulatory approval for the
Lamira® Nebulizer System and other product
candidate devices in each market and for each usage; failure to
successfully commercialize ARIKAYCE, the Company's only approved
product, in the U.S., Europe or
Japan (amikacin liposome
inhalation suspension, Liposomal 590 mg Nebuliser Dispersion, and
amikacin sulfate inhalation drug product, respectively), or to
maintain U.S., European or Japanese approval for ARIKAYCE; business
or economic disruptions due to catastrophes or other events,
including natural disasters or public health crises; impact of the
COVID-19 pandemic and efforts to reduce its spread on the Company's
business, employees, including key personnel, patients, partners
and suppliers; risk that brensocatib does not prove effective
or safe for patients in ongoing and future clinical studies,
including the ASPEN
study; risk that TPIP does not prove to be effective or safe
for patients in ongoing and future clinical
studies; uncertainties in the degree of market acceptance of
ARIKAYCE by physicians, patients, third-party payors and others in
the healthcare community; the Company's inability to obtain full
approval of ARIKAYCE from the U.S. Food and Drug Administration,
including the risk that the Company will not successfully or in a
timely manner complete the study to validate a patient reported
outcome tool and the confirmatory post-marketing clinical trial
required for full approval of ARIKAYCE; inability of the Company,
PARI or the Company's other third-party manufacturers to comply
with regulatory requirements related to ARIKAYCE or the
Lamira® Nebulizer System; the Company's inability
to obtain adequate reimbursement from government or third-party
payors for ARIKAYCE or acceptable prices for ARIKAYCE; development
of unexpected safety or efficacy concerns related to ARIKAYCE or
the Company's product candidates; inaccuracies in the Company's
estimates of the size of the potential markets for ARIKAYCE,
brensocatib, TPIP or the Company's other product candidates or in
data the Company has used to identify physicians, expected rates of
patient uptake, duration of expected treatment, or expected patient
adherence or discontinuation rates; the Company's inability to
create an effective direct sales and marketing infrastructure or to
partner with third parties that offer such an infrastructure for
distribution of ARIKAYCE or any of the Company's product candidates
that are approved in the future; failure to obtain regulatory
approval to expand ARIKAYCE's indication to a broader patient
population; risk that the Company's competitors may obtain
orphan drug exclusivity for a product that is essentially the same
as a product the Company is developing for a particular
indication; failure to successfully predict the time and cost
of development, regulatory approval and commercialization for novel
gene therapy products; failure to successfully conduct future
clinical trials for ARIKAYCE, brensocatib, TPIP and the Company's
other product candidates due to the Company's limited experience in
conducting preclinical development activities and clinical trials
necessary for regulatory approval and its potential inability to
enroll or retain sufficient patients to conduct and complete the
trials or generate data necessary for regulatory approval, among
other things; risks that the Company's clinical studies will
be delayed or that serious side effects will be identified during
drug development; failure of third parties on which the Company is
dependent to manufacture sufficient quantities of ARIKAYCE or the
Company's product candidates for commercial or clinical needs, to
conduct the Company's clinical trials, or to comply with the
Company's agreements or laws and regulations that impact the
Company's business or agreements with the Company; the
Company's inability to attract and retain key personnel or to
effectively manage the Company's growth; the Company's inability to
successfully integrate its recent acquisitions and appropriately
manage the amount of management's time and attention devoted to
integration activities; risks that the Company's acquired
technologies, products and product candidates are not commercially
successful; the Company's inability to adapt to its highly
competitive and changing environment; risk that the Company is
unable to maintain its significant customers; risk that government
healthcare reform materially increases the Company's costs and
damages its financial condition; the Company's inability to
adequately protect its intellectual property rights or prevent
disclosure of its trade secrets and other proprietary information
and costs associated with litigation or other proceedings related
to such matters; restrictions or other obligations imposed on the
Company by agreements related to ARIKAYCE or the Company's product
candidates, including its license agreements with PARI and
AstraZeneca AB, and failure of the Company to comply with its
obligations under such agreements; the cost and potential
reputational damage resulting from litigation to which the Company
is or may become a party, including product liability claims; risk
that the Company's operations are subject to a material disruption
in the event of a cybersecurity attack or issue; business
disruptions or expenses related to the upgrade to the Company's
enterprise resource planning system; the Company's limited
experience operating internationally; changes in laws and
regulations applicable to the Company's business, including any
pricing reform, and failure to comply with such laws and
regulations; the Company's history of operating losses, and the
possibility that the Company may never achieve or maintain
profitability; goodwill impairment charges affecting the Company's
results of operations and financial condition; inability to repay
the Company's existing indebtedness and uncertainties with respect
to the Company's ability to access future capital; and delays in
the execution of plans to build out an additional third-party
manufacturing facility approved by the appropriate regulatory
authorities and unexpected expenses associated with those
plans.
The Company may not actually achieve the results, plans,
intentions or expectations indicated by the Company's
forward-looking statements because, by their nature,
forward-looking statements involve risks and uncertainties because
they relate to events and depend on circumstances that may or may
not occur in the future. For additional information about the risks
and uncertainties that may affect the Company's business, please
see the factors discussed in Item 1A, "Risk Factors," in the
Company's Annual Report on Form 10-K for the year
ended December 31, 2021 and any subsequent Company filings
with the Securities and Exchange Commission (SEC).
The Company cautions readers not to place undue reliance on any
such forward-looking statements, which speak only as of the date of
this press release. The Company disclaims any obligation, except as
specifically required by law and the rules of the SEC, to publicly
update or revise any such statements to reflect any change in
expectations or in events, conditions or circumstances on which any
such statements may be based, or that may affect the likelihood
that actual results will differ from those set forth in the
forward-looking statements.
Contact:
Investors:
Eleanor Barisser
Associate Director, Investor Relations
Insmed
(718) 594-5332
eleanor.barisser@insmed.com
Media:
Mandy Fahey
Executive Director, Corporate Communications
Insmed
(732) 718-3621
amanda.fahey@insmed.com
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SOURCE Insmed Incorporated