A Medical Device Daily
Insulet (Bedford, Massachusetts) reported that it has entered into an agreement with Deerfield Management Co. to provide Insulet with up to $60 million in financing through a flexible credit facility.
"We are pleased that Deerfield, an acknowledged leader in healthcare investing, sees the potential of our business strategy and that we now have a flexible credit facility enabling us to continue to expand the market for the OmniPod System," said Duane DeSisto, president/CEO of Insulet. "This $60 million facility is an attractive form of financing that limits dilution for our shareholders and gives Insulet access to capital to fuel our growth."
Deerfield will provide Insulet with $27.5 million within 15 business days of signing and has committed up to $32.5 million in additional funding to be drawn by Insulet at its discretion over the next 20 months based on the achievement of certain financial performance milestones. Any amounts drawn will accrue interest until maturity at a rate of 9.75% per annum which is payable on a quarterly basis. Insulet will pay a 2.75% per annum interest rate on undrawn amounts. The funds drawn are repayable in September 2012.
"The OmniPod System is an innovative product with significant growth potential in the diabetes market and other applications," said Howard Furst, MD, Deerfield partner. "We are confident in the strength of Insulet's business strategy and are pleased to be facilitating the continued expansion of these opportunities for OmniPod. We believe this performance driven financing aligns the incentives and goals of both investors and management."
In conjunction with the initial $27.5 million draw, Insulet has agreed to issue warrants for 3.75 million shares of common stock with an exercise price of $3.13 per share. As financial milestones are achieved, Insulet may draw from the remaining $32.5 million available in $6.5 million increments.
Stereotaxis (St. Louis) said that it has extended its credit facility with Silicon Valley Bank, a member company of SVB Financial Group. Under the new agreement, which matures on March 31, 2010, the company can borrow up to $25 million.
"This extension of our line of credit, combined with our existing cash position and other financing sources, provides us with the financial resources we believe we need to execute our business plan," said Mike Kaminski, Stereotaxis president/CEO. "In light of our recent $20 million capital raise, our outlook on our financing needs and the opportunity to reduce the cost of borrowing, we voluntarily reduced the size of the line from $30 million to $25 million. Silicon Valley Bank has been a valued partner in our growth and this extension demonstrates their continued confidence in our strategy and ability to achieve our objectives."