On May 13, 2021 Insmed Incorporated (Nasdaq: INSM) reported the closing of the previously announced registered underwritten public offering (the "Equity Offering") of 11,500,000 shares of its common stock (the "Shares"), including 1,500,000 Shares issued pursuant to the exercise in full of the underwriters’ option to purchase additional Shares, at a price to the public of $25.00 per share before deducting underwriting discounts and commissions, and the previously announced registered underwritten public offering (the "Notes Offering") of $575 million aggregate principal amount of its 0.75% convertible senior notes due 2028 (the "Notes"), including $75 million aggregate principal amount of Notes purchased pursuant to the exercise in full of the underwriters’ option to purchase additional Notes, solely to cover over-allotments (Press release, Insmed, MAY 13, 2021, View Source [SID1234580031]). A portion of the net proceeds from the offering of the Notes will be used to repurchase $225 million in aggregate principal amount of Insmed’s existing outstanding 1.75% Convertible Senior Notes due 2025 (the "2025 Notes"). The gross proceeds to Insmed from the offerings, before deducting underwriting discounts and commissions and other offering expenses payable by Insmed, were $287.5 million and $575 million, respectively.
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The Notes are senior unsecured obligations of Insmed and rank senior in right of payment to any of Insmed’s future indebtedness that is expressly subordinated in right of payment to the Notes and rank equally in right of payment with all of Insmed’s existing and future liabilities that are not so subordinated, including the existing 2025 Notes. The Notes will accrue interest payable semiannually in arrears on June 1 and December 1 of each year at the rate of 0.75% per year, beginning on December 1, 2021. The Notes will mature on June 1, 2028, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date. Prior to June 6, 2025, Insmed will not have the right to redeem the Notes. Subject to certain conditions, on or after June 6, 2025, Insmed may redeem for cash all or a part of the Notes. Prior to March 1, 2028, the Notes will be convertible at the option of holders of the Notes only upon satisfaction of certain conditions and during certain periods, and thereafter, will be convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, holders of the Notes will receive shares of Insmed common stock, cash or a combination thereof, at Insmed’s election. The conversion rate for the Notes is initially 30.7692 shares of Insmed common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $32.50 per share, and is subject to adjustment under the terms of the Notes. Insmed may be obligated to increase the conversion rate for any conversion that occurs in connection with certain corporate events or a redemption of the Notes by Insmed. The initial conversion price represents a premium of approximately 30% over the public offering price per share of the Shares in the Equity Offering.
Concurrently with the offerings, Insmed entered into separate and privately negotiated repurchase transactions with certain holders of a portion of the 2025 Notes. In these transactions, Insmed will repurchase 2025 Notes with an aggregate principal amount of $225 million for an aggregate repurchase price of approximately $238.9 million, using a portion of the net proceeds from the Notes Offering. Insmed intends to use the remaining net proceeds from the Notes Offering and the net proceeds from the Equity Offering to fund activities related to the commercialization and development of ARIKAYCE, further research and development of brensocatib, TPIP or any of its product candidates, and for other general corporate purposes, including business expansion activities.
J.P. Morgan Securities LLC and SVB Leerink LLC acted as book-running managers for the offerings. Morgan Stanley & Co. LLC also acted as a book-running manager for the offerings. Credit Suisse Securities (USA) LLC and Stifel, Nicolaus & Company, Incorporated acted as co-lead managers for the Equity Offering. Cantor Fitzgerald & Co. and H.C. Wainwright & Co., LLC acted as co-managers for the Equity Offering.
A shelf registration statement on Form S-3 (File No. 333-238560) relating to the Equity Offering and the Notes Offering as described above has been filed with the Securities and Exchange Commission ("SEC"), and became automatically effective upon filing on May 21, 2020. A final prospectus supplement relating to and describing the terms of each offering was filed with the SEC and is available on the SEC’s website at www.sec.gov. Alternatively, copies may be obtained 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 [email protected]; or SVB Leerink LLC, Attention: Syndicate Department, One Federal Street, 37th Floor, Boston, MA 02110, by telephone at (800) 808-7525, ext. 6105 or by email at [email protected].
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.