ARIAD Announces Proposed $175 Million Offering of Convertible Senior Notes Due 2019
June 11 2014 - 4:01PM
Business Wire
ARIAD Pharmaceuticals, Inc. (NASDAQ: ARIA) today announced its
intention to offer, subject to market and other conditions, $175
million aggregate principal amount of convertible senior notes due
2019 (the “Notes”) in a private placement. The Notes will be
offered by the initial purchasers only to qualified institutional
buyers pursuant to Rule 144A under the Securities Act of 1933 (the
“Act”). ARIAD also intends to grant the initial purchasers of the
Notes an option, exercisable for 30 days, to purchase up to an
additional $50 million aggregate principal amount of the Notes on
the same terms and conditions.
The Notes will be senior unsecured obligations of ARIAD, and
interest will be payable semi-annually. The Notes will be
convertible by the holders beginning December 15, 2018, or earlier
upon specified events, and upon conversion, the holders will
receive, at ARIAD’s option, shares of ARIAD’s common stock, cash or
a combination of shares and cash. The interest rate, initial
conversion rate and other terms of the Notes will be determined by
negotiations between ARIAD and the initial purchasers.
In connection with the pricing of the Notes, ARIAD expects to
enter into a convertible note hedge transaction with an affiliate
of one of the initial purchasers (the “option counterparty”). The
convertible note hedge transaction is expected generally to reduce
the potential dilution to ARIAD’s common stock upon any conversion
of Notes and/or offset any cash payments ARIAD may be required to
make in excess of the principal amount of converted Notes, in each
case, in the event that the market price per share of ARIAD’s
common stock, as measured under the terms of the convertible note
hedge transaction, is greater than the strike price of the
convertible note hedge transaction. ARIAD also expects to enter
into a warrant transaction with the option counterparty. The
warrant transaction could separately have a dilutive effect to the
extent that the market value per share of ARIAD’s common stock as
measured over the applicable valuation period at the maturity of
the warrants exceeds the applicable strike price of the
warrants.
ARIAD expects that in connection with establishing its initial
hedge of the convertible note hedge and warrant transactions, the
option counterparty or an affiliate thereof expects to enter into
various derivative transactions with respect to ARIAD’s common
stock concurrently with or shortly after the pricing of the Notes.
This activity could increase (or reduce the size of any decrease
in) the market price of ARIAD’s common stock or the Notes at that
time. In addition, ARIAD expects that the option counterparty or an
affiliate thereof may modify its hedge positions from time to time
by entering into or unwinding various derivatives with respect to
ARIAD’s common stock or other ARIAD securities in secondary market
transactions following the pricing of the Notes and prior to the
maturity of the Notes (and are likely to do so during any
observation period related to a conversion of the Notes). This
activity could also cause or avoid an increase or a decrease in the
market price of ARIAD’s common stock or the Notes, which could
affect the ability of Note holders to convert the Notes and, to the
extent the activity occurs during any observation period related to
a conversion of the Notes, it could affect the amount and value of
the consideration that Note holders will receive upon conversion of
the Notes.
ARIAD intends to use a portion of the net proceeds of the
offering to pay the cost of the convertible note hedge transaction
(after such cost is partially offset by the proceeds from the
warrant transaction). ARIAD intends to use the remainder of the net
proceeds of the offering for its operations, including, but not
limited to sales, marketing, manufacturing and distribution of
Iclusig® (ponatinib); global development of its other product
candidates, including clinical trials, product and process
development, manufacturing and other activities; discovery research
efforts to add to its pipeline of product candidates; and for other
general corporate purposes, including, but not limited to repayment
or refinancing of indebtedness or other corporate borrowings,
capital expenditures and possible acquisitions.
The Notes will be offered to qualified institutional buyers
pursuant to Rule 144A under the Act. Neither the Notes nor the
shares of ARIAD’s common stock issuable upon conversion of the
Notes, if any, have been registered under the Act or the securities
laws of any other jurisdiction and may not be offered or sold in
the United States absent registration or an applicable exemption
from such registration requirements.
This press release does not constitute an offer to sell, or a
solicitation of an offer to buy, nor shall there be any sale of
these securities in any state or jurisdiction in which such offer,
solicitation or sale is unlawful. Any offers of the securities will
be made only by means of a private offering memorandum pursuant to
Rule 144A under the Act.
About ARIAD
ARIAD Pharmaceuticals, Inc., headquartered in Cambridge,
Massachusetts and Lausanne, Switzerland, is an integrated global
oncology company focused on transforming the lives of cancer
patients with breakthrough medicines. ARIAD is working on new
medicines to advance the treatment of various forms of chronic and
acute leukemia, lung cancer and other difficult-to-treat cancers.
ARIAD utilizes computational and structural approaches to design
small-molecule drugs that overcome resistance to existing cancer
medicines.
Forward-Looking Statements
This press release contains forward-looking
statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, as amended,
including statements about whether or not we will offer the Notes
or consummate the offering, the anticipated terms of the Notes and
the offering, statements concerning the proposed convertible note
hedge and warrant transactions, related derivative transactions and
market activities by the option counterparty and/or its affiliates,
and the potential effects of such transactions, and the anticipated
use of the proceeds from the offering. Actual results or
developments may differ materially from those projected or implied
in these forward-looking statements. Factors that may cause such a
difference include, without limitation, risks and uncertainties
related to whether or not we will be able to raise capital through
the sale of the Notes, the final terms of the proposed offering,
market and other conditions, the satisfaction of customary closing
conditions related to the proposed offering and the impact of
general economic, industry or political conditions in the United
States or internationally. There can be no assurance that we will
be able to complete the proposed offering on the anticipated terms,
or at all. You should not place undue reliance on these
forward-looking statements, which apply only as of the date of this
press release. Additional risks and uncertainties relating to the
proposed offering, ARIAD and our business can be found under the
heading “Risk Factors” in the filings that we periodically make
with the SEC. In addition, the forward-looking statements included
in this press release represent our views as of the date of this
press release. We anticipate that subsequent events and
developments will cause our views to change. However, while we may
elect to update these forward-looking statements at some point in
the future, we specifically disclaim any obligation to do so. These
forward-looking statements should not be relied upon as
representing our views as of any date subsequent to the date of
this press release.
ARIAD Pharmaceuticals, Inc.For InvestorsKendra Adams,
617-503-7028Kendra.adams@ariad.comorFor MediaLiza Heapes,
617-620-4888Liza.heapes@ariad.com
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