SAN DIEGO, Feb. 24, 2021 /PRNewswire/ -- Halozyme
Therapeutics, Inc. (NASDAQ: HALO) ("Halozyme" or the "Company"), a
leader in converting IV biologics to subcutaneous delivery, today
announced the pricing of $700 million
aggregate principal amount of its convertible senior notes due 2027
(the "Convertible Notes"). The Convertible Notes are being offered
in a private placement to qualified institutional buyers pursuant
to Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"). The Company granted an option to the initial
purchasers to purchase up to an additional $105 million aggregate principal amount of
Convertible Notes.
The Convertible Notes will be senior, unsecured, obligations of
the Company, will pay interest semi-annually in arrears at an
annual rate of 0.25% and under certain circumstances, will be
convertible into cash and, if applicable, shares of the Company's
common stock, at the Company's election. The Convertible Notes have
an initial conversion rate of 12.9576 shares of the Company's
common stock per $1,000 principal
amount of Convertible Notes (which is equivalent to an initial
conversion price of approximately $77.17 per share of the Company's common stock,
representing an initial conversion premium of approximately 50%
above the closing price of $51.45 per
share of the Company's common stock on February 24, 2021). The conversion rate is
subject to adjustment in some events but will not be adjusted for
any accrued and unpaid interest. Holders of the Convertible Notes
will have the right to require the Company to repurchase all or a
portion of their Convertible Notes upon the occurrence of a
fundamental change (as defined in the indenture governing the
Convertible Notes) at a cash repurchase price of 100% of their
principal amount plus any accrued and unpaid interest. The
Convertible Notes will mature on March 1, 2027, unless
repurchased, redeemed or converted in accordance with their terms
prior to such date. Prior to the close of business on the business
day immediately preceding September 1, 2026, the Convertible
Notes will be convertible only upon the satisfaction of certain
conditions and during certain periods, and on and
after September 1, 2026, at any time prior to the close of
business on the scheduled trading day immediately preceding the
maturity date regardless of these conditions. The Company expects
to close the offering on March 1,
2021, subject to the satisfaction of various customary
closing conditions.
The Company will receive net proceeds from the offering of
approximately $681.9 million (or
approximately $784.3 million if the
initial purchasers exercise their option to purchase additional
Convertible Notes in full). The Company expects to use a portion of
the net proceeds of the offering to enter into privately negotiated
agreements with certain holders of its outstanding 1.25%
convertible senior notes due 2024 (the "Existing Convertible
Notes") to exchange their Existing Convertible Notes for a
combination of cash and shares of its common stock through
privately negotiated transactions entered into concurrently with or
shortly after the offering (the "Note Repurchases"). In connection
with the Note Repurchases, the Company expects to pay approximately
$370.2 million in cash, which
includes accrued interest, and issue approximately 9.08 million
shares of its common stock, to settle such exchanges. In addition,
the Company plans to use up to $75.0
million of the net proceeds from the offering to repurchase
shares of its common stock under its existing stock repurchase
program (the "Share Repurchases").
These Note Repurchases and Share Repurchases could increase (or
reduce the size of any decrease in) the market price of Halozyme
common stock or the Convertible Notes. We also expect that some
existing noteholders may purchase or sell shares of the Company's
common stock in the market to hedge their exposure in connection
with these transactions. The Note Repurchases, Share Repurchases
and any associated hedging by holders could have affected or affect
the market price of the Company's common stock prior to,
concurrently with or shortly after the pricing of the Convertible
Notes, and could have also resulted in a higher effective
conversion price for the Convertible Notes.
The Company intends to use the remainder of the net proceeds
from the offering for general corporate purposes, including other
repurchases of the Company's common stock from time to time under
its existing stock repurchase program, working capital, capital
expenditures, potential acquisitions and strategic transactions. If
the initial purchasers exercise their option to purchase additional
Convertible Notes, the Company intends to use net proceeds from the
sale of additional Convertible Notes for general corporate
purposes.
This press release is neither an offer to sell nor a
solicitation of an offer to buy the Convertible Notes or the shares
of the Company's common stock issuable upon conversion of the
Convertible Notes, if any, nor shall there be any sale of these
securities in any state or jurisdiction in which such an offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such state or
jurisdiction. Any offer of these securities will be made only by
means of a private offering memorandum.
The offer and sale of the Convertible Notes and the shares of
the Company's common stock issuable upon conversion of the
Convertible Notes, if any, have not been registered under the
Securities Act, or the securities laws of any other jurisdiction,
and the Convertible Notes and such shares may not be offered or
sold in the United States absent
registration or an applicable exemption from registration
requirements.
Forward-looking Statements:
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995
regarding the planned offering. Words such as "anticipates,"
"estimates," "expects," "projects," "forecasts," "intends,"
"plans," "will," "believes" and words and terms of similar
substance used in connection with any discussion identify
forward-looking statements. These forward-looking statements are
based on management's current expectations and beliefs about future
events and are inherently susceptible to uncertainty and changes in
circumstances. Except as required by law, the Company is under no
obligation to, and expressly disclaim any obligation to, update or
alter any forward-looking statements whether as a result of such
changes, new information, subsequent events or otherwise. With
respect to the planned offering, such uncertainties and
circumstances include whether the Company will consummate the
offering; and the use of the net proceeds from the offering.
Various factors could also adversely affect the Company's
operations, business or financial results in the future and cause
the Company's actual results to differ materially from those
contained in the forward-looking statements, including those
factors discussed in detail in the "Risk Factors" sections
contained in the Company's Annual Report on Form 10-K for the year
ended December 31, 2020 which is
filed with the Securities and Exchange Commission.
About Halozyme Therapeutics, Inc.
Halozyme is a biopharmaceutical company focused on bringing
disruptive solutions to significantly improve patient experiences
and outcomes for emerging and established therapies. Halozyme
advises and supports its biopharmaceutical partners in key aspects
of new drug development with the goal of improving patients' lives
while helping its partners achieve global commercial success.
Halozyme's proprietary enzyme rHuPH20 forms the basis of the
ENHANZE® technology and is used to facilitate the
delivery of injected drugs and fluids, potentially reducing the
treatment burden of other drugs to patients. Halozyme has licensed
its ENHANZE® technology to leading pharmaceutical
and biotechnology companies including Roche, Baxalta, Pfizer,
Janssen, AbbVie, Lilly, Bristol-Myers Squibb, Alexion, argenx and
Horizon Therapeutics. Halozyme derives revenues from these
collaborations in the form of milestones and royalties as the
Company's partners make progress developing and commercializing
their products being developed with ENHANZE®. Halozyme
is headquartered in San Diego.
Contact:
Al Kildani
Vice President, Investor Relations and Corporate Communications
858-704-8122
ir@halozyme.com
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SOURCE Halozyme Therapeutics, Inc.