-- Initial Purchasers Have Option to
Purchase $40 Million of Additional Notes --
Omeros Corporation (Nasdaq: OMER) (“Omeros”) today announced the
pricing of an offering of $210 million aggregate principal amount
of its 6.25% Convertible Senior Notes due 2023 (the “Notes”) in a
private offering (the “Offering”) to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933 (the
“Securities Act”). Omeros has granted the initial purchasers of the
Notes an option to purchase up to an additional $40 million
aggregate principal amount of the Notes on the same terms and
conditions referenced above.
The Notes will be senior unsecured obligations of Omeros and
interest will be payable semi-annually in arrears at a rate of
6.25% per annum. The Notes will mature on November 15, 2023, unless
converted, repurchased or redeemed in accordance with their terms
prior to such date. The Notes will be convertible, upon the
satisfaction of certain conditions or during specified periods,
into cash, shares of Omeros’ common stock or a combination thereof
as Omeros elects at its sole discretion. Omeros will have the right
to redeem the Notes on or after November 15, 2019, subject to
certain conditions.
The initial conversion rate of the Notes is 52.0183 shares of
Omeros’ common stock per $1,000 principal amount of the Notes,
which is equivalent to an initial conversion price of approximately
$19.22 per share of Omeros’ common stock, and is subject to
adjustment in certain circumstances. This initial conversion price
represents a premium of approximately 20% over the last reported
sale price on November 8, 2018 of Omeros’ common stock of $16.02
per share. Omeros has entered into the capped call transaction
described below in order to avoid dilution to Omeros’ shareholders
from conversions of the Notes if Omeros’ common stock price does
not exceed $28.8360, which represents a premium of 80% over the
last reported sale price of Omeros’ common stock.
The aggregate gross proceeds to Omeros from the offering of the
Notes will be $210 million, exclusive of any proceeds attributable
to the initial purchasers’ possible exercise of their option to
purchase additional Notes. Omeros intends to use a portion of the
net proceeds of the offering to repay in full the amounts
outstanding under Omeros’ secured Term Loan Agreement with CRG
Servicing LLC (the “Term Loan Agreement”), which has an annual
interest rate of 12.25% and matures on September 30, 2022. Amounts
repaid will include all accrued but unpaid interest and prepayment
fees under the Term Loan Agreement.
Cantor Fitzgerald & Co. and UBS Investment Bank are acting
as joint bookrunners for the offering. Cantor Fitzgerald & Co.
is also acting as the sole structuring advisor for the
offering.
In connection with the pricing of the Notes, Omeros entered into
a capped call transaction with Royal Bank of Canada, or RBC. The
capped call transaction is intended to minimize the potential
dilution of Omeros’ common stock and/or offset potential cash
payments in excess of the principal amount of the converted Notes
upon conversion of the Notes, as Omeros elects at its sole
discretion, in the event that the market price per share of Omeros’
common stock, as measured under the terms of the capped call
transaction, is greater than the strike price of the capped call
transaction, which initially corresponds to the conversion price of
the Notes and is subject to anti-dilution adjustments substantially
similar to those applicable to the conversion rate of the Notes.
If, however, the market price per share of Omeros’ common stock, as
measured under the terms of the capped call transaction, exceeds
the cap price of the capped call transaction, there would
nevertheless, upon conversion, be dilution or a cash expenditure,
as elected by Omeros in its sole discretion, to the extent that
such market price exceeds the cap price of the capped call
transaction. The cap price under the capped call transaction will
initially be $28.8360 per share, which represents a premium of 80%
over the last reported sale price of Omeros’ common stock on
November 8, 2018, and is subject to certain adjustments under the
terms of the capped call transaction. If the initial purchasers
exercise their option to purchase additional Notes, Omeros expects
to enter into an additional capped call transaction.
Omeros has been advised that, in connection with establishing
its initial hedge of the capped call transaction, RBC and/or its
affiliates expect to enter into various derivative transactions
with respect to Omeros’ 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 Omeros’
common stock or the Notes at that time. In addition, Omeros has
been advised that RBC and/or its affiliates may modify their hedge
positions by entering into or unwinding various derivatives with
respect to Omeros’ common stock and/or purchasing or selling
Omeros’ common stock 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 Notes). This activity could also cause or avoid an
increase or a decrease in the market price of Omeros’ common stock
or the Notes.
In addition to repaying the Term Loan Agreement and entering
into the capped call transaction, Omeros intends to use the
remainder of the net proceeds of the offering for general corporate
purposes, including funding research and development for Omeros’
OMS721 programs and clinical trials, pre-clinical studies,
manufacturing and other costs associated with advancing Omeros’
product candidates toward Marketing Authorization Application,
Biologics License Application and New Drug Application submissions.
If the initial purchasers exercise their option to purchase
additional notes, then Omeros intends to use the additional net
proceeds to fund the cost of entering into any additional capped
call transactions and for general corporate purposes as described
above. The offering is expected to close on November 15, 2018,
subject to customary closing conditions.
This press release does not constitute an offer to sell or
the solicitation of an offer to buy any securities of Omeros. Any
offers of the Notes will be made only by means of a private
offering memorandum. The offer and sale of the Notes and any shares
of Omeros common stock issuable upon conversion of the Notes have
not been, and will not be, registered under the Securities Act or
the securities laws of any other jurisdiction, and the Notes and
such shares may not be offered or sold in the United States absent
registration or an applicable exemption from the Securities Act and
applicable state laws.
About Omeros Corporation
Omeros is a commercial-stage biopharmaceutical company committed
to discovering, developing and commercializing small-molecule and
protein therapeutics for large-market as well as orphan indications
targeting inflammation, complement-mediated diseases and disorders
of the central nervous system. The company’s drug product OMIDRIA®
(phenylephrine and ketorolac intraocular solution) 1% / 0.3% is
marketed for use during cataract surgery or intraocular lens (IOL)
replacement to maintain pupil size by preventing intraoperative
miosis (pupil constriction) and to reduce postoperative ocular
pain. In the European Union, the European Commission has approved
OMIDRIA for use in cataract surgery and other IOL replacement
procedures to maintain mydriasis (pupil dilation), prevent miosis
(pupil constriction), and to reduce postoperative eye pain. Omeros
has multiple Phase 3 and Phase 2 clinical-stage development
programs focused on: complement-associated thrombotic
microangiopathies; complement-mediated glomerulonephropathies;
cognitive impairment; and addictive and compulsive disorders. In
addition, Omeros has a diverse group of preclinical programs and a
proprietary G protein-coupled receptor (GPCR) platform through
which it controls 54 new GPCR drug targets and corresponding
compounds, a number of which are in preclinical development. The
company also exclusively possesses a novel antibody-generating
platform.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of
the Securities Exchange Act of 1934, which are subject to the “safe
harbor” created by those sections for such statements. All
statements other than statements of historical fact are
forward-looking statements, which are often indicated by terms such
as “anticipate,” “believe,” “could,” “estimate,” “expect,” “goal,”
“intend,” “likely”, “look forward to,” “may,” “plan,” “potential,”
“predict,” “project,” “prospects,” “should,” “slated,” “will,”
“would” and similar expressions and variations thereof.
Forward-looking statements are based on management’s beliefs and
assumptions and on information available to management only as of
the date of this press release. Omeros’ actual results could differ
materially from those anticipated in these forward-looking
statements for many reasons, including, without limitation, risks
associated with product commercialization and commercial
operations, unproven preclinical and clinical development
activities, regulatory oversight, the ability for OMIDRIA to obtain
separate reimbursement as part of CMS’ OPPS, intellectual property
claims, competitive developments, litigation, and the risks,
uncertainties and other factors described under the heading “Risk
Factors” in the company’s Quarterly Report on Form 10-Q filed with
the Securities and Exchange Commission on November 8, 2018. Given
these risks, uncertainties and other factors, you should not place
undue reliance on these forward-looking statements, and the company
assumes no obligation to update these forward-looking statements,
even if new information becomes available in the future.
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version on businesswire.com: https://www.businesswire.com/news/home/20181109005206/en/
Cook Williams Communications, Inc.Jennifer Cook Williams,
360-668-3701Investor and Media Relationsjennifer@cwcomm.org
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