Flexion Therapeutics Announces Pricing of $175 Million 3.375% Convertible Senior Notes due 2024
April 26 2017 - 7:04PM
Flexion Therapeutics, Inc. (Nasdaq:FLXN) today announced the
pricing of $175.0 million aggregate principal amount of 3.375%
convertible senior notes due 2024 (the “Notes”) in a private
placement to qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended (the “Securities
Act”). The size of the offering was increased by $50 million from
the previously announced offering size of $125 million. In
connection with the offering, Flexion has granted the initial
purchasers of the Notes a 30-day option to purchase up to an
additional $26.25 million aggregate principal amount of the Notes,
solely to cover over-allotments, if any. The sale of the Notes is
expected to close on May 2, 2017, subject to customary closing
conditions.
Flexion estimates that the net proceeds from the
Notes offering will be approximately $169.5 million, or $195.0
million if the initial purchasers exercise their option to purchase
additional Notes in full, after deducting the initial purchasers’
discount and estimated offering expenses. Flexion intends to use
the net proceeds from the Notes offering for the commercialization
and manufacture of ZilrettaTM (also known as FX006), if approved,
product pipeline development, as well as working capital and
general corporate purposes. Flexion may also use a portion of the
net proceeds to in-license, acquire or invest in complementary
businesses, technologies, products or assets.
The Notes will be general unsecured obligations
of Flexion, and interest of 3.375% per year will be payable
semiannually in arrears on May 1 and November 1 of each year,
beginning on November 1, 2017. The Notes will mature on May 1,
2024, unless earlier redeemed, repurchased or converted in
accordance with their terms. The initial conversion rate will be
37.3413 shares of common stock per $1,000 principal amount of Notes
(equivalent to an initial conversion price of approximately $26.78
per share of common stock). The initial conversion price represents
a premium of approximately 30% to the $20.60 per share closing
price of Flexion’s common stock on The NASDAQ Global Market on
April 26, 2017.
Prior to the close of business on the business
day immediately preceding February 1, 2024, the Notes will be
convertible at the option of holders only upon the satisfaction of
certain conditions. Thereafter, the Notes will be convertible at
the option of the holders at any time until the close of business
on the business day immediately preceding maturity on May 1, 2024.
The Notes will be convertible into cash, shares of Flexion's common
stock, or a combination thereof, at Flexion’s election.
Flexion may redeem, for cash, all or any portion
of the Notes, at its option, on or after May 6, 2020 if the last
reported sale price of Flexion’s common stock has been at least
130% of the conversion price for at least 20 trading days during
any 30 consecutive day trading period, at a redemption price equal
to 100% of the principal amount of the Notes to be redeemed, plus
accrued and unpaid interest. If Flexion undergoes a “fundamental
change”, holders of the Notes may require Flexion to repurchase for
cash all or any portion of their Notes at a repurchase price equal
to 100% of the principal amount of the Notes to be repurchased,
plus accrued and unpaid interest.
The Notes are being sold to qualified
institutional buyers pursuant to Rule 144A under the Securities
Act. Neither the Notes nor any shares of Flexion’s common stock
issuable upon conversion of the Notes have been or will be
registered under the Securities 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
registration requirements.
This press release shall not constitute an offer
to sell or the solicitation of an offer to buy any securities, nor
shall there be any sale of securities in any state or jurisdiction
in which such an offer, solicitation or sale would be unlawful. Any
offers of the Notes were made only pursuant to Rule 144A under the
Securities Act, including by means of a confidential offering
memorandum.
About Flexion Therapeutics
Flexion is a specialty pharmaceutical company
focused on the development and commercialization of novel, local
therapies for the treatment of patients with musculoskeletal
conditions, beginning with osteoarthritis (“OA”). Flexion's lead
product candidate, Zilretta, is being investigated for its
potential to provide improved analgesic therapy for the millions of
U.S. patients who receive intra-articular injections for knee OA
annually.
Forward-Looking Statements
This press release contains “forward-looking”
statements, including all statements related to the expected
closing of the Notes offering and the expected amount and use of
net proceeds from the Notes offering. Any statements contained in
this press release that are not statements of historical fact may
be deemed to be forward-looking statements. Words such as
“intends,” “expects,” “will” and similar expressions are intended
to identify forward-looking statements. Forward-looking statements
involve risks and uncertainties. Flexion’s actual results and the
timing of events could differ materially from those anticipated in
such forward-looking statements as a result of these risks and
uncertainties, which include risks and uncertainties associated
with market conditions, the satisfaction of closing conditions
related to the Notes offering, and risks related to the application
of the net proceeds, if any, from the Notes offering. There can be
no assurance that Flexion will be able to complete the Notes
offering on the anticipated date, or at all. Flexion may continue
to need additional funding and may be unable to raise capital when
needed, which could force Flexion to delay, reduce or eliminate its
product development programs and/or commercialization efforts.
These and other risk factors related to Flexion and its business
are discussed under the heading “Risk Factors” in Flexion’s Annual
Report on Form 10-K, filed with the Securities and Exchange
Commission on March 10, 2017. These forward-looking statements are
based upon Flexion’s current expectations. Flexion expressly
disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained
herein to reflect any change in Flexion’s expectations with regard
thereto or any change in events, conditions or circumstances on
which any such statements are based, other than as may be required
under applicable law.
Corporate Contact:
Scott Young
Sr. Director, Corporate Communications & Investor Relations
Flexion Therapeutics, Inc.
T: 781-305-7194
syoung@flexiontherapeutics.com
Media Contact:
Danielle Lewis
Lazar Partners
T: 212-867-1768
flexionpr@lazarpartners.com
Investor Contact:
David Carey
Lazar Partners
T: 212-867-1768
dcarey@lazarpartners.com
Flexion Therapeutics (NASDAQ:FLXN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Flexion Therapeutics (NASDAQ:FLXN)
Historical Stock Chart
From Apr 2023 to Apr 2024