Insmed (INSM) announces strategic financings totaling $775 million

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Insmed Incorporated (Nasdaq: INSM), a global biopharmaceutical company whose mission is to transform the lives of patients with serious and rare diseases, today announced three strategic financings raising aggregate gross proceeds of $775 million. The proceeds from the transactions will strengthen Insmed’s financial position, which will position the Company to provide clinical data on each of its four pillars.

“Insmed is at a pivotal moment in its history, as we prepare to serve many more patients with serious and rare diseases. We believe these fundings provide the company with sufficient resources to advance our four pillars through key clinical trials and prepare for the commercial potential availability of ARIKAYCE for front-line NTM lung disease and brensocatib for bronchiectasis. commented Will Lewis, Chairman and CEO of Insmed. “We appreciate the thorough due diligence carried out by the investors involved and share their enthusiasm for the Insmed pipeline and our vision for the future.”

“We are thrilled 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 with debilitating diseases and invests significantly in additional therapies that address significant unmet needs.

“This partnership illustrates our collective confidence in the strength of Insmed’s global ARIKAYCE franchise and the potential of brensocatib to fight neutrophil-induced disease,” said Matthew Rizzo, General Partner at OrbiMed. “We are delighted to support Insmed as the company advances its rare disease pipeline.”

$350 million senior secured loanInsmed has entered into a $350 million senior secured term loan agreement with funds managed by Pharmakon Advisors, LP, a leading non-dilutive debt investor for the life sciences industry and manager of BioPharma Credit Funds (the “Term Loan”) . The five-year term loan matures in October 2027. The term loan bears interest at a rate based on the secured overnight funding rate (SOFR), subject to a SOFR floor of 2.5% , in addition to a margin of 7.75% per year.

$150M Synthetic Royalty Financing AgreementThe Company has also entered into a $150 million secured royalty financing agreement with OrbiMed, a leading healthcare investor. Under the agreement, OrbiMed will be entitled to receive royalties of 4% on worldwide net sales of ARIKAYCE® (Amikacin Liposome Inhalation Suspension) through September 1, 2025, and royalties of 4. 5% on worldwide net sales of ARIKAYCE from September 1, 2025, as well as royalties of 0.75% on worldwide net sales of brensocatib (the “Royalty Funding”). 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 royalty financing will be secured by a set of guarantees covering all assets, governed by the terms of an intercreditor agreement entered into between BioPharma Credit PLC, as collateral agent, OrbiMed Royalty & Credit Opportunities IV, LP and Insmed.

Transactions for the term loan and royalty financing closed on October 19, 2022.

AdvisorsSVB Securities LLC acted as Insmed’s exclusive financial advisor on term lending and royalty financing. Covington & Burling LLP acted as legal counsel to Insmed in connection with the term loan and royalty financing. Akin Gump Strauss Hauer & Feld LLP acted as legal counsel to Pharmakon Advisors, LP on the term loan. Morrison & Foerster LLP acted as legal counsel to OrbiMed in connection with the royalty financing.

Subscribed offering of $275 million of common stockIn addition, Insmed announced today that it has agreed to sell 13,750,000 shares of common stock at a price per share of $20.00 pursuant to a subscribed offer (the “Offer”). Insmed expects gross proceeds from the offering to be approximately $275 million, before deducting underwriting discounts and fees and other offering costs. The offering is expected to close on October 21, 2022, subject to customary closing conditions.

JP Morgan Securities LLC and SVB Securities LLC are acting as joint account holders for the Offer.

Insmed intends to use the net proceeds from the term loan, royalty financing and offering to fund activities related to the commercialization of ARIKAYCE, the potential commercial launch of brensocatib, if approved, and furthering the research and development of ARIKAYCE, brensocatib, TPIP, its medical efforts, or any of its product candidates, and for other general corporate purposes, including the activities of business expansion.

The offering is made pursuant to Insmed’s shelf registration statement on Form S-3 (File No. 333-238560) which was previously filed with the Securities and Exchange Commission (“SEC”) and has become automatically effective May 21, 2020. the definitive prospectus supplement and accompanying prospectus relating to the offering will be filed with the SEC and will be available on the SEC’s website at Copies of the final prospectus supplement and accompanying prospectus may be obtained, when available, from: JP Morgan Securities LLC, Attention: Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone at (866) 803-9204 or by email at [email protected]; or SVB Securities LLC, Attention: Syndicate Department, 53 State Street, 40th Floor, Boston, Massachusetts 02109, by phone at (800) 808-7525, ext. 6105, or by email at [email protected].

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