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Bedford-based medical device maker Insulet Corp. has won a funding commitment worth $60 million from a health care investor.
Insulet (Nasdaq: PODD) said that health care investor Deerfield Management Co. will provide up to $60 million in “flexible credit facility” to enable Insulet to expand the market for its tubing-free OmniPod insulin management system. This facility will also limit ownership dilution for Insulet shareholders as well, the company said.
Under the agreement’s terms, Deerfield will provide Insulet with $27.5 million in 15 business days after the agreement is signed. Deerfield has also committed as much as $32.5 million in additional funding to Insulet, to be withdrawn at Insulet’s discretion in the next twenty months. Access to this cash is also based on the achievement of financial performance milestones, Insulet stated.
Any cash withdrawn will accrue interest until maturity at a rate of 9.75 percent per annum, payable on a quarterly basis. Moreover, Insulet will pay a 2.75 percent per annum interest rate on undrawn amounts. Withdrawn cash is repayable in September 2012.
In addition to the $27.5 million draw, Insulet will issue warrants for 3.75 million shares of common stock with an exercise price of $3.13 per share.
Earlier this month, Insulet appointed Brian Roberts as chief financial officer, replacing former CFO Carsten Boess.
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