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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): May 31, 2000
INSMED INCORPORATED
(Exact name of registrant as specified in its charter)
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<S> <C>
VIRGINIA 0-30739 54-1972729
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification No.)
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800 East Leigh Street, Richmond, VA 23219
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (804) 828-6893
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 31, 2000, Insmed Incorporated, a Virginia corporation ("Insmed"
or the "Company") acquired all of the outstanding shares of Celtrix
Pharmaceuticals, Inc., a Delaware corporation ("Celtrix") pursuant to an Amended
and Restated Agreement and Plan of Reorganization by and among Insmed, Celtrix,
Celtrix Mergersub, Inc. ("Celtrix Mergersub") and Insmed Pharmaceuticals, Inc.,
dated as of February 9, 2000 (the "Reorganization Agreement"). Pursuant to the
Reorganization Agreement, the Company issued approximately 39,397,772 shares of
Insmed common stock to the former Celtrix stockholders, representing an
aggregate consideration of approximately $72 million. Celtrix, a
biopharmaceutical company, develops novel drug candidates to treat seriously
debilitating, degenerative conditions primarily associated with aging, chronic
diseases and severe trauma.
Insmed effected the acquisition through a merger and a share exchange.
Pursuant to the Reorganization Agreement, Celtrix Mergersub, a wholly-owned
subsidiary of Insmed merged with and into Celtrix with Celtrix as the surviving
corporation (the "Merger"). As a result of the Merger, Celtrix became a
wholly-owned subsidiary of Insmed. In addition, pursuant to the Reorganization
Agreement, Insmed Pharmaceuticals, Inc., a Virginia corporation ("Insmed
Pharmaceuticals") and the Company conducted a share exchange by which Insmed
Pharmaceuticals shareholders exchanged their shares of Insmed Pharmaceuticals
capital stock for shares of Insmed capital stock (the "Share Exchange" and
together with the Merger, the "Reorganizations"). Following the Share Exchange,
Insmed Pharmaceuticals also became a wholly-owned subsidiary of Insmed.
Pursuant to the Reorganization Agreement, each holder of Celtrix common
stock received one (1) share of Insmed common stock in exchange for each share
of Celtrix common stock held as of the effective time of the Reorganizations
(the "Effective Time") and each holder of Celtrix Series A Preferred Stock
received approximately 526.68 shares of Insmed common stock in exchange for each
share of Celtrix Series A Preferred Stock held as of the Effective Time.
Pursuant to the Reorganization Agreement, each Insmed Pharmaceuticals
shareholder received 3.5 shares of Insmed common stock for each share of Insmed
Pharmaceuticals common stock and Insmed Pharmaceuticals Series A Preferred Stock
and Insmed Pharmaceuticals Series B Preferred Stock held as of the Effective
Time. Each option to purchase shares of Celtrix common stock outstanding at the
Effective Time converted into a new option to purchase shares of Insmed common
stock equal to the number of shares purchasable under the Celtrix option. Each
option or warrant to purchase shares of Insmed Pharmaceuticals common stock
outstanding at the Effective Time converted into a new option or warrant, as the
case may be, to purchase a number of shares of Insmed common stock equal to the
number of shares of Insmed Pharmaceuticals common stock that were subject to the
option or warrant, as the case may be, multiplied by 3.5 at an exercise price
per share divided by 3.5 and rounded up to the nearest tenth of a cent. These
exchange ratios were determined in arms-length negotiations. Pursuant to the
Reorganization Agreement, the Company is paying cash instead of issuing
fractional shares or options or warrants to purchase fractional shares. Insmed's
common stock is listed on the Nasdaq Small Cap market under the symbol "INSM."
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Other than one director who abstained solely because of a potential
conflict of interest, the Insmed Board of Directors unanimously approved the
Reorganizations. Edgar G. Engleman, a member of the Insmed and Insmed
Pharmaceuticals board of directors, is a General Partner of BioAsia Investments,
LLC. BioAsia is the general partner of Biotechnology Development Fund, L.P. and
Biotechnology Development Fund III, L.P. As of February 9, 2000, the date the
parties executed the Reorganization Agreement, the Biotechnology Fund(s) owned
(i) 917,500 shares of Insmed Pharmaceuticals Series B Preferred Stock; (ii)
4,530,516 shares of Celtrix common stock; (iii) an option to purchase 75,000
shares of Celtrix common stock at an exercise price of $2.438 per share, which
the Biotechnology Fund(s) subsequently exercised; and (iv) a warrant to purchase
615,258 shares of Celtrix common stock at an exercise of $2.68 per share, which
the Biotechnology Fund(s) subsequently exercised. Dr. Engleman participated in a
number of Celtrix board meetings in an "observer" status, with no voting rights.
Further, at Celtrix Board meetings he acknowledged his position as a director of
Insmed Pharmaceuticals and any possible conflict of interest arising out of his
association with both companies by absenting himself from the process and
discussions concerning the proposed Reorganizations. At board meetings of Insmed
and Insmed Pharmaceuticals, Dr. Engleman abstained on all voting matters related
to the Reorganizations.
Also on May 31, 2000, the Company and Insmed Pharmaceuticals completed
a sale of Insmed Pharmaceuticals common stock and Insmed warrants pursuant to a
Purchase Agreement among Insmed, Insmed Pharmaceuticals and certain investors
named therein, dated January 13, 2000 (the "Purchase Agreement"). A group of
investors led by Cooper Hill Partners, LLC and including funds managed by Orbi
Med Advisors, Quantum Partners and Vector Fund Management (the "Investors"),
purchased a total of 5,632,678 shares of Insmed Pharmaceuticals common stock and
6,901,344 warrants of Insmed, with each warrant exercisable into one share of
Insmed common stock at a price of $2.25. In connection with this financing, the
Company received an aggregate consideration of $34.5 million. Immediately after
the Effective Time, the Investors owned approximately 22.1% of the Company.
With the acquisition of Celtrix, the Company adds SomatoKine(R) to its
product portfolio. Currently in Phase II clinical trials, SomatoKine is a human
recombinant equivalent to the naturally occurring complex of the hormone,
insulin-like growth factor-I (IGF-I) and its primary binding protein (IGFBP3).
Results from a Phase II study indicate SomatoKine has the potential to amplify
bone repair metabolism and functional recovery following hip fracture. In a
study of patients with type 1 diabetes, SomatoKine reduced insulin requirements
and lowered average daily glucose levels.
After the acquisition, Insmed now has a clinical stage product
portfolio that includes drugs for type 1 and type 2 diabetes, polycystic ovary
syndrome, and osteoporotic hip fracture. The Company believes that the expanded
product portfolio should increase business development activities and improve
financial results.
The foregoing description is qualified in its entirety by reference to
the Joint Proxy Statement/Prospectus of Insmed Pharmaceuticals and Celtrix,
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dated as of May 4, 2000, included in Insmed's Registration Statement on Form S-
4, dated as of February 10, 2000, as amended (File No. 333-30098), the
Reorganization Agreement, the Purchase Agreement and the Press Release, dated
June 1, 2000, announcing the completion of the Reorganizations, which are filed
as exhibits hereto and incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired.
The financial information required by this item will be filed by
amendment not later than August 14, 2000.
(b) Pro Forma Financial Information.
The financial information required by this item will be filed by
amendment not later than August 14, 2000.
(c) Exhibits
2.1 Amended and Restated Agreement and Plan of Reorganization by
and among Insmed, Inc., Celtrix Pharmaceuticals, Inc., Celtrix
Mergersub, Inc. and Insmed Pharmaceuticals, Inc. dated as of
February 9, 2000 (incorporated herein by reference to Annex A
to the Joint Proxy Statement/Prospectus included in the
Company's Registration Statement on Form S-4 filed with the
Commission on February 10, 2000, as amended
(File No. 333-30098)).
2.2 Purchase Agreement among Insmed, Inc., Insmed Pharmaceuticals,
Inc. and certain investors named therein dated January 13,
2000 (incorporated herein by reference to Exhibit 10.12 to the
Joint Proxy Statement/Prospectus included in the Company's
Registration Statement on Form S-4 filed with the Commission
on February 10, 2000, as amended (File No. 333-30098)).
4.1 Article VI of the Articles of Incorporation of Insmed
Incorporated (incorporated herein by reference to Annex H to
the Joint Proxy Statement/Prospectus included in the Company's
Registration Statement on Form S-4 filed with the Commission
on February 10, 2000, as amended (File No. 333-30098)).
4.2 Specimen Stock Certificates Representing Common Stock, $.01
par value per share, of the Company (incorporated herein by
reference to Exhibit 4.2 to the Joint Proxy
Statement/Prospectus included in the Company's Registration
Statement on Form S-4 filed with the Commission on February
10, 2000, as amended (File No. 333-30098)).
23.1 Consent of Ernst & Young LLP.
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23.2 Consent of Ernst & Young LLP.
99.1 Press Release dated June 1, 2000 (incorporated by reference to
the Company's Current Report on Form 8-K filed with the
Commission on June 1, 2000 (File No. 0-30739)).
99.2 Joint Proxy Statement/Prospectus dated May 4, 2000 of Insmed
Pharmaceuticals and Celtrix (incorporated herein by reference
to the Joint Proxy Statement/Prospectus included in the
Company's Registration Statement on Form S-4 filed with the
Commission on February 10, 2000, as amended (File No.
333-30098)).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INSMED INCORPORATED
Date: June 15, 2000 By: /s/ Michael D. Baer
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Michael D. Baer
Chief Financial Officer
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INSMED INCORPORATED
INDEX TO EXHIBITS
Exhibit Number
2.1 Amended and Restated Agreement and Plan of Reorganization by
and among Insmed, Inc., Celtrix Pharmaceuticals, Inc., Celtrix
Mergersub, Inc. and Insmed Pharmaceuticals, Inc. dated as of
February 9, 2000 (incorporated herein by reference to Annex A
to the Joint Proxy Statement/Prospectus included in the
Company's Registration Statement on Form S-4 filed with the
Securities and Exchange Commission (the "Commission") on
February 10, 2000, as amended (File No. 333-30098)).
2.2 Purchase Agreement among Insmed, Inc., Insmed Pharmaceuticals,
Inc. and certain investors named therein dated January 13,
2000 (incorporated herein by reference to Exhibit 10.12 to the
Joint Proxy Statement/Prospectus included in the Company's
Registration Statement on Form S-4 filed with the Commission
on February 10, 2000, as amended (File No. 333-30098)).
4.1 Article VI of the Articles of Incorporation of Insmed
Incorporated (incorporated herein by reference to Annex H to
the Joint Proxy Statement/Prospectus included in the Company's
Registration Statement on Form S-4 filed with the Commission
on February 10, 2000, as amended (File No. 333-30098)).
4.2 Specimen Stock Certificates Representing Common Stock, $.01
par value per share, of the Company (incorporated herein by
reference to Exhibit 4.2 to the Joint Proxy
Statement/Prospectus included in the Company's Registration
Statement on Form S-4 filed with the Commission on February
10, 2000, as amended (File No. 333-30098)).
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Ernst & Young LLP.
99.1 Press Release dated June 1, 2000 (incorporated by reference to
the Company's Current Report on Form 8-K filed with the
Commission on June 1, 2000 (File No. 0-30739)).
99.2 Joint Proxy Statement/Prospectus dated May 4, 2000 of Insmed
Pharmaceuticals and Celtrix (incorporated herein by reference
to the Joint Proxy Statement/Prospectus included in the
Company's Registration Statement on Form S-4 filed with the
Commission on February 10, 2000, as amended (File No.
333-30098)).
