RICHMOND, VIRGINIA, February 12, 2009 – Insmed Inc. (Nasdaq: INSM), a developer of follow-on biologics and biopharmaceuticals focused on niche markets with unmet medical needs, announced today that it has entered into a definitive agreement with Merck & Co., Inc. whereby Merck, through an affiliate, will purchase all assets related to Insmed’s follow-on biologics platform. Under the terms of the agreement, Insmed will receive a total of $130 million for the assets. After fees, taxes and other costs related to the transaction, Insmed expects net proceeds of approximately $123 million as a result of this agreement.
As part of this transaction, Insmed will receive initial payments of up to $10 million for Insmed´s lead follow-on-biologic candidates and the remaining balance upon closing of the transaction, which is targeted for March 31, 2009. These initial payments will allow the Company to maintain its normal business operations throughout the closing period without the need for dilutive financing.
Insmed´s follow-on biologics assets include INS-19 and INS-20, whose development and commercial rights will now belong to Merck, as well as the Boulder, Colorado-based manufacturing facility. Merck intends to assume the facility’s lease and ownership of all the equipment in the building. In addition, upon closing of the transaction, Merck intends to offer positions to employees of the Boulder facility. Insmed will retain its Richmond, VA corporate office, which houses its Clinical, Regulatory, Finance, and Administrative functions, in support of the continuing IPLEX™ program.
“We have long maintained that our follow-on biologics assets hold substantial value, and this agreement with Merck, one of the largest pharmaceutical companies in the world, is a testament to that value,” said Dr. Geoffrey Allan, President and CEO of Insmed. “We are pleased that over the past two years our team has been successful in developing such a valuable asset, which, as a result of this agreement, will generate a substantial return to the Company.”
“This transaction will transform and strengthen our balance sheet in a completely non-dilutive fashion, and provides us with substantial financial flexibility in a market where cash, especially for small biotech companies, is scarce,” continued Dr. Allan.
The proceeds from the transaction will be used to support the continued development of IPLEX™, and the Company will carefully evaluate other options, which could include the distribution of a portion of the cash to shareholders.
This news release contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and involve risks and uncertainties, which may cause results to differ materially from those set forth in the statements. The forward-looking statements may include statements regarding product development, product potential, or financial performance. No forward-looking statement can be guaranteed and actual results may differ materially from those projected. Merck undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements in this booklet should be evaluated together with the many uncertainties that affect Merck's business, particularly those mentioned in the risk factors and cautionary statements in Item 1A of Merck's Form 10-K for the year ended Dec. 31, 2008, and in any risk factors or cautionary statements contained in the Company's periodic reports on Form 10-Q or current reports on Form 8-K, which the Company incorporates by reference.
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