Item 1.01 Entry into a Material Definitive Agreement.
Notes and the Indenture
On
August 14, 2017, Radius Health, Inc. (the Company) completed its previously announced public offering (the Offering) of $300 million aggregate principal amount of the Companys 3.00% Convertible Senior
Notes due 2024 (the Notes). The Company has granted the underwriters in the Offering a
30-day
option to purchase up to an additional $45 million principal amount of the Notes solely to cover
over-allotments.
The net proceeds from the Offering were approximately $290.8 million after deducting the underwriters
discounts and commissions and the estimated offering expenses payable by the Company. The Company intends to use the net proceeds from the offering to support the U.S. commercial launch of TYMLOS (abaloparatide) injection and the
development of its life cycle management activities, such as the Companys investigational abaloparatide transdermal patch, and to advance the development of its pipeline of product candidates, including a Phase 2 clinical trial of
elacestrant (RAD1901) in breast cancer and a Phase 1 study of RAD140 in breast cancer, and for general corporate purposes.
The Notes are
governed by the terms of a base indenture for senior debt securities (the Base Indenture), as supplemented by the first supplemental indenture thereto (the Supplemental Indenture and together with the Base Indenture, the
Indenture), each dated as of August 14, 2017, by and between the Company and Wilmington Trust, National Association, as trustee (the Trustee). The Notes are the senior unsecured obligations of the Company and bear
interest at a rate of 3.00% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2018. The Notes will mature on September 1, 2024, unless earlier repurchased, redeemed or
converted. The Notes will be convertible into cash, shares of the Companys common stock, par value $0.0001 per share (the Common Stock), or a combination thereof, at the Companys election, at an initial conversion rate of
20.4891 shares of Common Stock per $1,000 principal amount of the Notes, which corresponds to an initial conversion price of approximately $48.81 per share of Common Stock and represents a conversion premium of approximately 32.5% based on the last
reported sale price of the Common Stock of $36.835 per share on August 8, 2017, the date the Offering was priced.
The conversion
rate is subject to adjustment from time to time upon the occurrence of certain events, including, but not limited to, the issuance of stock dividends and payment of cash dividends. At any time prior to the close of business on the business day
immediately preceding June 1, 2024, holders may convert their Notes at their option only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2017 (and only
during such calendar quarter), if the last reported sale price of the Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding
calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the measurement period) in which the
trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Common Stock and the conversion rate on each such trading day; (3) upon
the occurrence of specified
corporate events; or (4) if the Company calls the Notes for redemption. On or after June 1, 2024, until the close of business on the business day immediately preceding the maturity
date, holders may convert all or any portion of their Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. If a make-whole fundamental change (as defined in the Indenture) occurs and
a holder elects to convert its Notes in connection with such make-whole fundamental change, such holder may be entitled to an increase in the conversion rate as described in the Indenture.
Prior to September 1, 2021, the Company may not redeem the Notes. On or after September 1, 2021, the Company may redeem for cash all
or part of the Notes if the last reported sale price of the Common Stock equals or exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending
within five trading days prior to the date on which the Company provides notice of the redemption. The redemption price will be the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any. No sinking fund is provided
for the Notes.
If a fundamental change (as defined in the Indenture) occurs at any time, subject to certain conditions, holders may
require the Company to purchase all or any portion of their Notes at a purchase price equal to 100% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase
date.
The Indenture includes customary covenants and sets forth certain events of default after which the Notes may be declared
immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving the Company after which the Notes become automatically due and payable.
The foregoing description of the Indenture and the Notes does not purport to be complete and is qualified in its entirety by reference to the
Base Indenture, Supplemental Indenture and form of Note filed hereto as Exhibit 4.1, Exhibit 4.2 and Exhibit 4.3, respectively, which are incorporated herein by reference.