Contact Information: Contact: Stephanie Marks for Insulet Corporation (212) 867-1762 or 877-PODD-IR1 (877-763-3471)
Insulet Amends Deerfield Credit Facility and Issues Stock
More Than $12 Million in Savings Expected Over Next Three Years
| Source: Insulet Corporation
BEDFORD, MA--(Marketwire - September 28, 2009) - Insulet Corporation (NASDAQ : PODD ), the leader
in tubing-free insulin pump technology with its OmniPod® Insulin
Management System, today announced that it has amended its $60 million
credit facility with Deerfield Management Company, which was signed in
March 2009.
Under the terms of the amended agreement, Insulet will repay the $27.5
million of currently outstanding debt by issuing 2,855,659 shares of common
stock to Deerfield at a price of $9.63 per share. This represents a 6%
discount from Insulet's closing price of $10.28 on September 25, 2009.
As part of this amendment, Deerfield has agreed to eliminate all future
performance-related milestones associated with the remaining $32.5 million
available on the credit facility and reduce the annual interest rate on any
borrowed funds to 8.5% from 9.75%. In addition, Deerfield will forego the
remaining 1.5 million additional warrants that would have been issued upon
future draws. Insulet will immediately draw down the remaining $32.5
million available on the credit facility at closing. These changes are
expected to result in more than $12 million in cash and non-cash interest
savings to Insulet over the remaining term of the credit facility. As a
result of the amendment, Insulet will record in the third quarter a one
time non-cash interest charge of approximately $6 million to accelerate the
amortization related to the warrants and other costs in connection with the
original draw last March. The borrowed funds remain repayable in September
2012.
"This transaction enhances Insulet's financial flexibility and enables us
to continue to drive adoption of the OmniPod Insulin Management System
around the world," said Duane DeSisto, President and Chief Executive
Officer of Insulet Corporation. "Deerfield believed in the promise of the
OmniPod System last March by providing us with additional capital, which
allowed us to continue to focus on the execution of our business plan. We
believe the amended agreement demonstrates continued support of our
long-term prospects on significantly improved financial terms for our
shareholders. We are pleased to be able to continue to partner with
Deerfield Management and thank them for their support."
"Since the signing of the credit facility agreement in March, Insulet has
exceeded our expectations, prompting us to revisit the assumptions
underlying the original credit facility agreement," commented Howard Furst,
MD, Partner, Deerfield Management Company. "In light of our increased
confidence in management's ability to execute its business plan, we are
pleased to be able to remove the financial performance hurdles, reduce the
interest rate and eliminate any additional warrant coverage that we built
into the remainder of the credit facility."
This press release is neither an offer to sell nor a solicitation of an
offer to buy any of the securities discussed herein, nor shall there be any
sale of these securities in any state or other jurisdiction in which such
offer, solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of any state.
About Insulet Corporation
Insulet Corporation is an innovative medical device company dedicated to
improving the lives of people with diabetes. The Company's OmniPod Insulin
Management System is a revolutionary, discreet and easy-to-use insulin
infusion system that features two easy-to-use parts with no tubing and
fully-automated cannula insertion. Through the OmniPod System, Insulet
seeks to expand the use of insulin pump therapy among people with
insulin-dependent diabetes. Founded in 2000, Insulet is based in Bedford,
MA.
Forward-Looking Statement
This press release contains forward-looking statements concerning Insulet's
expectations, anticipations, intentions, beliefs or strategies regarding
the future, including those related to its expected revenue and operating
losses, market potential, planned expansion in the U.S. and abroad, product
demand, access to additional capital in the future and financial
performance. These forward-looking statements are based on its current
expectations and beliefs concerning future developments and their potential
effects on it. There can be no assurance that future developments affecting
it will be those that it has anticipated. These forward-looking statements
involve a number of risks, uncertainties (some of which are beyond its
control) or other assumptions that may cause actual results or performance
to be materially different from those expressed or implied by these
forward-looking statements. These risks and uncertainties include, but are
not limited to: risks associated with the Company's dependence on the
OmniPod System; Insulet's ability to increase customer orders and
manufacturing volumes; adverse changes in general economic conditions;
Insulet's inability to raise additional funds in the future on acceptable
terms or at all; potential supply problems or price fluctuations with sole
source or other third-party suppliers on which Insulet is dependent;
international business risks; Insulet's inability to obtain adequate
coverage or reimbursement from third-party payors for the OmniPod System
and potential adverse changes in reimbursement rates or policies relating
to the OmniPod; potential adverse effects resulting from competition with
competitors; technological innovations adversely affecting the Company's
business; potential termination of Insulet's license to incorporate a blood
glucose meter into the OmniPod System; Insulet's ability to protect its
intellectual property and other proprietary rights; conflicts with the
intellectual property of third parties, including claims that Insulet's
current or future products infringe the proprietary rights of others;
adverse regulatory or legal actions relating to the OmniPod System; failure
of Insulet's contract manufacturers or component suppliers to comply with
FDA's quality system regulations, the potential violation of federal or
state laws prohibiting "kickbacks" or protecting patient health
information, or any challenges to or investigations into Insulet's
practices under these laws; product liability lawsuits that may be brought
against Insulet; reduced retention rates; unfavorable results of clinical
studies relating to the OmniPod System or the products of Insulet's
competitors; potential future publication of articles or announcement of
positions by physician associations or other organizations that are
unfavorable to Insulet's products; the expansion, or attempted expansion,
into foreign markets; the concentration of substantially all of Insulet's
manufacturing capacity at a single location in China and substantially all
of Insulet's inventory at a single location in Massachusetts; Insulet's
ability to attract and retain key personnel; Insulet's ability to manage
its growth; fluctuations in quarterly results of operations; risks
associated with potential future acquisitions; Insulet's ability to
generate sufficient cash to service all of its indebtedness; the expansion
of Insulet's distribution network; Insulet's ability to successfully
maintain effective internal controls; and other risks and uncertainties
described in its Annual Report on Form 10-K, which was filed with the
Securities and Exchange Commission on March 16, 2009 in the section
entitled "Risk Factors," and in its other filings from time to time with
the Securities and Exchange Commission. Should one or more of these risks
or uncertainties materialize, or should any of its assumptions prove
incorrect, actual results may vary in material respects from those
projected in these forward-looking statements. Insulet undertakes no
obligation to publicly update or revise any forward-looking statements.