Insmed signs $350 million senior secured term loan with BioPharma

By Mary-Katherine Stinson

Lexington, Ky., Oct. 19 – Insmed Inc. entered into a loan agreement on Oct. 19 providing for a $350 million senior secured term loan with BioPharma Credit PLC as collateral agent, BPCR LP and BioPharma Credit Investments V (Master) LP, according to an 8-K filing with the Securities and Exchange Commission.

The term loan matures Oct. 19, 2027.

It bears interest at SOFR plus 775 basis points, subject to a 2.5% SOFR floor.

The company may elect to pay up to 50% of the interest payable during the first 24 months in-kind, in which case such paid-in-kind interest will be capitalized and added to the principal amount.

Payments will begin in the 13th quarter following closing but may be extended by the company for an additional four quarters to start in the 17th quarter subject to the achievement of specified amikacin liposome inhalation suspension (Arikayce) data thresholds and other conditions.

Also on Oct. 19, Insmed entered into a revenue interest purchase agreement with OrbiMed Royalty & Credit Opportunities IV, LP.

Under the agreement, OrbiMed will pay $150 million to Insmed at closing in exchange for royalties equaling 4% of Arikayce global net sales prior to Sept. 1, 2025 and 4.5% of Arikayce global net sales on or after that date, as well as 0.75% of brensocatib global net sales, if approved.

If revenue interest payments do not equal at least $150 million prior to the payment date for the quarter ending March 31, 2028, then the royalty interest rate will be increased for all subsequent quarters to a rate which would equal $150 million if applied retroactively.

The total revenue interest payments are capped at 1.8x of the purchase price or up to a maximum of 1.9x of the purchase price under certain conditions.

In the case of a change of control, the company can be required to repurchase the remaining revenue interest payments up to 18 months after closing at $187.5 million, after 18 months to 24 months after closing at $195 million, after 24 months to 36 months after closing at $225 million and after 36 months after closing at $270 million, reduced by the amount of payments already made.

Insmed is a Bridgewater, N.J.-based biopharmaceutical company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.