Under the terms of the amended agreement, Insulet will repay the $27.5 million of currently outstanding debt by issuing 2,855,659 shares of common stock to Deerfield at a price of $9.63 per share. This represents a 6% discount from Insulet's closing price of $10.28 on September 25, 2009.

As part of this amendment, Deerfield has agreed to eliminate all future performance-related milestones associated with the remaining $32.5 million available on the credit facility and reduce the annual interest rate on any borrowed funds to 8.5% from 9.75%. In addition, Deerfield will forego the remaining 1.5 million additional warrants that would have been issued upon future draws. Insulet will immediately draw down the remaining $32.5 million available on the credit facility at closing. These changes are expected to result in more than $12 million in cash and non-cash interest savings to Insulet over the remaining term of the credit facility. As a result of the amendment, Insulet will record in the third quarter a one time non-cash interest charge of approximately $6 million to accelerate the amortization related to the warrants and other costs in connection with the original draw last March. The borrowed funds remain repayable in September 2012.

"This transaction enhances Insulet's financial flexibility and enables us to continue to drive adoption of the OmniPod Insulin Management System around the world," said Duane DeSisto, President and Chief Executive Officer of Insulet Corporation. "Deerfield believed in the promise of the OmniPod System last March by providing us with additional capital, which allowed us to continue to focus on the execution of our business plan. We believe the amended agreement demonstrates continued support of our long-term prospects on significantly improved financial terms for our shareholders. We are pleased to be able to continue to partner with Deerfield Management and thank them for their support."

"Since the signing of the credit facility agreement in March, Insulet has exceeded our expectations, prompting us to revisit the assumptions underlying the original credit facility agreement," commented Howard Furst, MD, Partner, Deerfield Management Company.