Item 1.01 Entry into a Material Definitive Agreement.
Completion of Senior Convertible Notes Offering
On
November 13, 2019, Cytokinetics, Incorporated (the Company) completed its registered underwritten public offering of $138 million aggregate principal amount of 4.00% Convertible Senior Notes due 2026 (such notes, the
Notes, and such offering, the Offering) pursuant to an underwriting agreement with Morgan Stanley & Co. LLC on behalf of itself and as representative of the several other underwriters named in Schedule I thereto,
described in Item 8.01 below, which includes $18 million aggregate principal amount of Notes sold pursuant to the full exercise of the underwriters option to purchase additional Notes, solely to cover over-allotments.
The Notes were offered and sold in a public offering registered under the Securities Act of 1933, as amended (the Securities Act), pursuant to a
registration statement on Form S-3 filed with the Securities and Exchange Commission on November 6, 2019, which was effective upon filing (Registration No. 333-234537), including the prospectus
supplement filed by the Company with the Securities and Exchange Commission pursuant to Rule 424(b)(5) under the Securities Act, dated November 7, 2019, to the prospectus contained in the registration statement (the Registration
Statement).
Base Indenture and Supplemental Indenture
The Company issued the Notes under an indenture, dated as of November 13, 2019 (the Base Indenture), between the Company and U.S. Bank
National Association, as trustee (the Trustee), as supplemented by the first supplemental indenture dated as of November 13, 2019 (the Supplemental Indenture and, together with the Base Indenture, the
Indenture), between the Company and the Trustee.
The Notes will mature on November 15, 2026 (the Maturity Date), unless
earlier repurchased, redeemed, or converted. The Notes are senior unsecured obligations of the Company and bear interest at an annual rate of 4.00%, payable semi-annually in arrears on May 15 and November 15 of each year, beginning on
May 15, 2020.
Holders may convert their Notes at their option only in the following circumstances: (1) during any calendar quarter commencing
after the calendar quarter ending on March 31, 2020 (and only during such calendar quarter), if the last reported sale price per share of the Companys common stock for each of at least 20 trading days, whether or not consecutive, during
the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter exceeds 130% of the conversion price on the applicable trading day; (2) during the five consecutive business
days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the measurement period) if 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 per share of the Companys common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on
the Companys common stock; (4) if the Company calls the Notes for redemption; and (5) at any time from, and including, July 15, 2026 until the close of business on the scheduled trading day immediately before the Maturity Date.
The Company will settle conversions by paying or delivering, as applicable, cash, shares of the Companys common stock, or a combination of cash and shares of the Companys common stock, at the Companys election, based on the
applicable conversion rate.
The initial conversion rate for the Notes is 94.7811 shares of the Companys common stock per $1,000 principal amount of
Notes, which represents an initial conversion price of approximately $10.55 per share. If a make-whole fundamental change (as defined in the Indenture) occurs, then the Company will in certain circumstances increase the conversion rate
for a specified period of time.
The Notes will be redeemable, in whole or in part, at the Companys option at any time, and from time to time, on or
after November 20, 2023 and, in the case of any partial redemption, on or before the 60th scheduled trading day before the Maturity Date, at a cash redemption price equal to the principal amount of the Notes to be redeemed, plus accrued and
unpaid interest, if any, to, but excluding, the redemption date but only if the last reported sale price per share of the Companys common stock exceeds 130% of the conversion price on (1) each of at least 20 trading days, whether or not
consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (2) the trading day immediately before the date the Company sends
such notice. If a fundamental change (as defined in the Indenture) occurs, then, subject to certain exceptions, holders may require the Company to repurchase their Notes at a cash repurchase price equal to the principal amount of the
Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.
The Indenture contains
customary events of default including: (1) a default in the payment when due (whether at maturity, upon redemption, repurchase upon fundamental change or otherwise) of the principal of, or the redemption price or fundamental change repurchase
price for, any Note; (2) a default for 30 days in the payment when due of interest on any