Incyte commences Dutch Auction tender offer to
repurchase up to $1.67 billion of outstanding common shares
Incyte Corporation (Nasdaq:INCY) (the “Company”) today announced
that its Board of Directors approved a share repurchase
authorization of $2.0 billion. The Company has commenced a modified
“Dutch Auction” tender offer to repurchase shares of its common
stock for an aggregate purchase price of up to $1.672 billion (the
“tender offer”).
“This tender offer reflects our confidence in the future outlook
of our business, the strength of our commercial product portfolio
and our clinical development pipeline and Incyte’s long-term value.
We believe the current valuation of Incyte stock makes repurchases
of our stock an attractive investment and an opportunity to enhance
long-term shareholder value,” said Hervé Hoppenot, Chief Executive
Officer, Incyte. “Our strong balance sheet, cash flow and access to
capital enable us to undertake this transaction while also
preserving the flexibility to further add to the growth of our
business through focused, strategic acquisitions.”
In addition, on May 12, 2024, Incyte entered into a separate
stock purchase agreement with Julian C. Baker (a member of Incyte’s
Board of Directors), Felix J. Baker, and entities affiliated with
Julian C. and Felix J. Baker, including funds advised by Baker
Bros. Advisors LP (collectively, the “Baker Entities”), to
repurchase up to $328.0 million of the Company’s common stock. This
would enable the Baker Entities to maintain their current ownership
level of approximately 16.4 percent of Incyte’s outstanding common
stock. The Baker Entities purchase will be at the same price per
share as is determined and paid in the tender offer.
Modified “Dutch Auction” Tender Offer
Incyte is offering to purchase up to $1.672 billion in value of
its common stock at a price not greater than $60.00 per share nor
less than $52.00 per share, net to the seller in cash, less any
applicable withholding taxes and without interest, upon the terms
and subject to the conditions set forth in the tender offer
documents that are being distributed to stockholders. The Company
reserves the right, in its sole discretion, to change the per share
purchase price options and to increase or decrease the aggregate
value of shares sought in the tender offer, subject to applicable
law. In accordance with the rules of the Securities and Exchange
Commission (“SEC”), Incyte may purchase in the offer up to an
additional 2 percent of its outstanding shares without amending or
extending the tender offer. On May 10, 2024, the Nasdaq closing
price of the common stock was $53.06 per share. The tender offer
will expire at 12:00 midnight, at the end of the day, New York City
time, on Monday, June 10, 2024, unless extended.
A modified Dutch Auction tender offer allows stockholders to
indicate how much stock they wish to tender and at what price
within the range described above. Based on the number of shares
tendered and the prices specified by the tendering stockholders,
Incyte will determine the lowest price per share that will enable
it to purchase $1.672 billion of common stock at such price, or a
lower amount depending on the number of shares that are properly
tendered and not properly withdrawn. All stock purchased in the
tender offer will be purchased at the same price, even if a
stockholder tendered at a lower price, so in some cases Incyte may
purchase stock at a price above the price indicated by the
stockholder tendering that stock. Incyte will not purchase stock
below a stockholder’s indicated price. If the tender offer is fully
subscribed, then $1.672 billion of common stock at the purchase
price determined by Incyte will be purchased (subject to Incyte’s
above-referenced ability to increase such numbers of shares),
representing approximately 12.4 percent to 14.3 percent of
outstanding common stock as of May 9, 2024, depending on the
purchase price payable for those shares pursuant to the tender
offer. Tenders of shares must be made prior to the expiration of
the tender offer and may be withdrawn at any time prior to the
expiration thereof.
If, at the final purchase price, shares representing more than
$1.672 billion of common stock at the applicable purchase price (or
such greater number of shares as Incyte may choose to purchase
without amending or extending the offer) are properly tendered and
not properly withdrawn, Incyte will purchase shares tendered at or
below that price on a pro rata basis. The tender offer will not be
conditioned on any minimum number of shares being tendered and will
not be subject to a financing condition; however, the tender offer
is subject to a number of other conditions described in the tender
offer documents.
While Incyte’s Board of Directors has authorized the Company to
make the tender offer, none of Incyte, its Board of Directors, the
dealer manager or the information agent makes any recommendation to
any stockholder as to whether to tender or refrain from tendering
any shares or as to the price or prices at which stockholders may
choose to tender their shares. Incyte has not authorized any person
to make any such recommendation. Stockholders must decide whether
to tender their shares and, if so, how many shares to tender and at
what price or prices. In doing so, stockholders should carefully
evaluate all of the information in the tender offer documents
before making any decision with respect to the tender offer and
should consult their own financial and tax advisors.
This press release is for informational purposes only and is not
an offer to buy or the solicitation of an offer to sell any shares
of common stock. The solicitation and offer to buy common stock
will only be made pursuant to the offer to purchase and the other
tender offer documents. A free copy of the tender offer documents
that will be filed by Incyte with the SEC may be obtained when
filed from the SEC’s website at www.sec.gov or from Incyte’s
website at www.incyte.com, or by calling D.F. King & Co., Inc.,
the information agent for the tender offer, at (866) 864-4943 (toll
free). Stockholders are urged to read these materials carefully
prior to making any decision with respect to the offer.
Stockholders who have questions may call the dealer manager for the
tender offer, Goldman Sachs & Co. LLC at (212) 902-8226 or D.F.
King & Co., Inc. at the number above.
Stock Purchase Agreement
The Company has entered into a stock purchase agreement with the
Baker Entities. Under the stock purchase agreement, the Baker
Entities have agreed not to tender or sell any shares in the tender
offer and instead have agreed to sell to the Company, following
completion of the offer, a pro rata number of shares based on the
number of shares that the Company purchases in the offer such that
the Baker Entities’ aggregate percentage ownership in the Company
will be substantially equal to the Baker Entities’ current levels
(the “Baker Entities Purchase”). The Baker Entities Purchase will
be at the same price per share as is determined and paid in the
offer and is expected to occur on the 11th business day following
the expiration of the offer. The closing of the Baker Entities
Purchase is subject to the completion of the offer. Assuming that
the offer is fully subscribed, the aggregate purchase price for the
shares purchased pursuant to the stock purchase agreement is
anticipated to be approximately $328.0 million. The Baker Entities,
in the aggregate, own 36,833,933 shares of common stock,
representing in the aggregate beneficial ownership of approximately
16.4 percent of outstanding common stock as of May 9, 2024. If the
tender offer is fully subscribed, the Company would repurchase a
total of approximately $2.0 billion of its common stock through the
tender offer and the stock purchase agreement (representing
approximately 14.8 percent to 17.1 percent of the Company’s
outstanding shares of common stock as of May 9, 2024, depending on
the purchase price payable for those shares).
About Incyte
A global biopharmaceutical company on a mission to Solve On.,
Incyte follows the science to find solutions for patients with
unmet medical needs. Through the discovery, development, and
commercialization of proprietary therapeutics, Incyte has
established a portfolio of first-in-class medicines for patients
and a strong pipeline of products in Oncology and Inflammation
& Autoimmunity. Headquartered in Wilmington, Delaware, Incyte
has operations in North America, Europe, and Asia. For additional
information on Incyte, please visit Incyte.com.
Forward-Looking Statements
Except for the historical information set forth herein, the
matters set forth in this release contain predictions, estimates
and other forward-looking statements, including any discussion of
the following: the future outlook of our business, the strength of
Incyte’s commercial product portfolio and clinical development
pipeline, Incyte’s long-term value and potential for growth, our
ability to do the stock repurchase while also preserving the
flexibility to further add to the potential growth of our business,
and statements about the expected tender offer, including the value
of shares that we expect to purchase in the tender offer and
whether we actually consummate the tender offer and the stock
purchase from the Baker Entities.
These forward-looking statements are based on Incyte’s current
expectations and subject to risks and uncertainties that may cause
actual results to differ materially, including unanticipated
developments in and risks related to: the acceptance of Incyte’s
products and the products of Incyte’s collaboration partners in the
marketplace; market competition; unexpected variations in the
demand for Incyte’s products and the products of Incyte’s
collaboration partners; the effects of announced or unexpected
price regulation or limitations on reimbursement or coverage for
Incyte’s products and the products of Incyte’s collaboration
partners; sales, marketing, manufacturing and distribution
requirements, including Incyte’s and its collaboration partners’
ability to successfully commercialize and build commercial
infrastructure for newly approved products and any additional
products that become approved; greater than expected expenses,
including expenses relating to litigation or strategic activities;
further research and development and the results of clinical trials
possibly being unsuccessful or insufficient to meet applicable
regulatory standards or warrant continued development; the ability
to enroll sufficient numbers of subjects in clinical trials and the
ability to enroll subjects in accordance with planned schedules;
determinations made by the FDA, EMA, and other regulatory agencies;
Incyte’s dependence on its relationships with and changes in the
plans of its collaboration partners; developments or changes in
economic or market conditions; developments or changes in the
securities markets, and other risks detailed in Incyte’s reports
filed with the Securities and Exchange Commission, including its
quarterly report on Form 10-Q for the quarter ended March 31, 2024.
Incyte disclaims any intent or obligation to update these
forward-looking statements.
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