Global Blood Therapeutics, Inc. (GBT) (NASDAQ: GBT) today announced
the pricing of $300.0 million aggregate principal amount of its
Convertible Senior Notes due 2028 (the “notes”) in a private
offering (the “offering”) to persons reasonably believed to be
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”). The
offering size was increased from the previously announced offering
size of $250.0 million aggregate principal amount of notes. GBT
also granted the initial purchasers of the notes a 13-day option to
purchase up to an additional $45.0 million aggregate principal
amount of notes (the “additional notes”). The sale of the notes to
the initial purchasers is expected to close on December 17, 2021,
subject to customary closing conditions, and is expected to result
in approximately $290.4 million (or approximately $334.1 million if
the initial purchasers exercise their option to purchase additional
notes in full) in net proceeds to GBT after deducting the initial
purchasers’ discounts and commissions and the estimated offering
expenses payable by GBT.
The notes will be senior, unsecured obligations of GBT and will
bear interest at a rate of 1.875% per year, payable semi-annually
in arrears on June 15 and December 15 of each year, beginning on
June 15, 2022. The notes will mature on December 15, 2028, unless
earlier converted, redeemed or repurchased. GBT may not redeem the
notes prior to December 20, 2027. GBT may redeem for cash all or
any portion of the notes (subject to certain limitations), at its
option, on or after December 20, 2027 and on or prior to the 31st
scheduled trading day immediately preceding the maturity date, if
the last reported sale price of GBT’s common stock has been at
least 130% of the conversion price then in effect for at least 20
trading days (whether or not consecutive), including the trading
day immediately preceding the date on which GBT provides notice of
redemption, during any 30 consecutive trading day period ending on,
and including, the trading day immediately preceding the date on
which GBT provides notice of redemption, at a redemption price
equal to 100% of the principal amount of the notes to be redeemed,
plus accrued and unpaid interest to, but excluding the redemption
date.
At any time before the close of business on the second scheduled
trading day preceding the maturity date, the notes will be
convertible at the option of the noteholders at an initial
conversion rate of 31.4985 shares of GBT’s common stock per $1,000
principal amount of notes (equivalent to an initial conversion
price of approximately $31.75 per share, which represents a
conversion premium of approximately 27.5% to the last reported sale
price of $24.90 per share of GBT’s common stock on The Nasdaq
Global Select Market on December 14, 2021). In connection with the
closing of the offering, GBT will irrevocably elect to settle
conversions, if any, of notes in shares of GBT common stock
together with cash in lieu of any fractional share, if
applicable.
In connection with the pricing of the notes, GBT entered into
privately negotiated capped call transactions with certain of the
initial purchasers of the notes or their respective affiliates and
certain other financial institutions (the “option counterparties”).
The capped call transactions are expected generally to reduce
potential dilution to GBT’s common stock upon conversion of any
notes and/or offset any potential cash payments GBT is required to
make in excess of the principal amount of converted notes, as the
case may be, with such reduction and/or offset subject to a cap.
The cap price of the capped call transactions will initially be
$49.80 per share, which represents a premium of 100% over the last
reported sale price of GBT’s common stock on December 14, 2021, and
is subject to certain adjustments under the terms of the capped
call transactions.
GBT has been advised that, in connection with establishing their
initial hedges of the capped call transactions, the option
counterparties or their respective affiliates expect to purchase
shares of GBT’s common stock and/or enter into various derivative
transactions with respect to GBT’s 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 GBT’s common stock or the notes at that time.
In addition, the option counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to GBT’s common stock
and/or purchasing or selling GBT’s common stock or other securities
of GBT in secondary market transactions prior to the maturity of
the notes (and are likely to do so on each exercise date for the
capped call transactions, which are expected to occur on each
trading day during the 30 trading day period beginning on the 31st
scheduled trading day prior to the maturity date of the notes, or
following any termination of any portion of the capped call
transactions in connection with any repurchase, redemption or early
conversion of the notes). This activity could also cause a decrease
or avoid an increase in the market price of GBT’s common stock or
the notes, which could affect the ability of noteholders to convert
the notes and, to the extent the activity occurs following a
conversion or during any observation period related to a conversion
of notes, it could affect the amount and value of the consideration
that noteholders will receive upon conversion of such notes.
GBT intends to use approximately $40.7 million of the net
proceeds from the offering of notes to pay the cost of the capped
call transactions. If the initial purchasers exercise their option
to purchase additional notes, GBT intends to use a portion of the
net proceeds from the sale of the additional notes to enter into
additional capped call transactions with the option counterparties.
GBT intends to use the remainder of the net proceeds from the
offering for the continued commercialization of Oxbryta® and the
clinical development of Oxbryta® and GBT’s product candidates, and
for other general corporate purposes, which may include potential
acquisitions, investments and strategic transactions.
The notes were only offered to persons reasonably believed to be
qualified institutional buyers pursuant to Rule 144A under the
Securities Act. Neither the notes nor the shares of GBT’s common
stock potentially issuable upon conversion of the notes, if any,
have been, or will be, registered under the Securities Act or the
securities laws of any other jurisdiction, and unless so
registered, may not be offered or sold in the United States except
pursuant to an applicable exemption from such registration
requirements.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy the securities described herein,
nor shall there be any sale of these securities in any state or
jurisdiction in which such offer, solicitation or sale would be
unlawful.
About Global Blood Therapeutics
Global Blood Therapeutics, Inc. (GBT) is a biopharmaceutical
company dedicated to the discovery, development and delivery of
life-changing treatments that provide hope to underserved patient
communities. Founded in 2011, GBT is delivering on its goal to
transform the treatment and care of sickle cell disease (SCD), a
lifelong, devastating inherited blood disorder. The company has
introduced Oxbryta® (voxelotor) tablets, the first FDA-approved
medicine that directly inhibits sickle hemoglobin polymerization,
the root cause of red blood cell sickling in SCD. GBT is also
advancing its pipeline program in SCD with inclacumab, a P-selectin
inhibitor in Phase 3 development to address pain crises associated
with the disease, and GBT021601 (GBT601), the company’s
next-generation hemoglobin S polymerization inhibitor. In addition,
GBT’s drug discovery teams are working on new targets to develop
the next wave of potential treatments for SCD.
Forward-Looking Statements
Certain statements in this press release are forward-looking
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements containing the words “will,”
“anticipates,” “plans,” “believes,” “forecast,” “estimates,”
“expects,” and “intends,” or similar expressions. These
forward-looking statements are based on GBT’s current expectations
and actual results could differ materially. Statements in this
press release include statements that are not historical facts and
are considered forward-looking within the meaning of Section 27A of
the Securities Act and Section 21E of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”). GBT intends these
forward-looking statements, including statements regarding the
timing and closing of the offering, the potential effects of the
capped call transactions, the potential dilution to GBT’s common
stock, the potential impact on market price, the potential payments
by GBT and conversion of the notes and the intended use of the
proceeds from the sale of the notes, to be covered by the safe
harbor provisions for forward-looking statements contained in
Section 27A of the Securities Act and Section 21E of the Exchange
Act, and GBT makes this statement for purposes of complying with
those safe harbor provisions. These forward-looking statements
reflect GBT’s current views about its plans, intentions,
expectations and strategies, which are based on the information
currently available to GBT and on assumptions GBT has made. GBT can
give no assurance that the plans, intentions, expectations or
strategies will be attained or achieved, and, furthermore, actual
results may differ materially from those described in the
forward-looking statements and will be affected by a variety of
risks and factors that are beyond GBT’s control, including, without
limitation, risks and uncertainties relating to the COVID-19
pandemic, including the extent and duration of the impact on GBT’s
business, including commercialization activities, regulatory
efforts, research and development, corporate development
activities, and operating results, which will depend on future
developments that are highly uncertain and cannot be accurately
predicted, such as the ultimate duration of the pandemic, travel
restrictions, quarantines, social distancing, and business closure
requirements in the U.S. and in other countries, and the
effectiveness of actions taken globally to contain and treat the
disease; the risks that GBT is continuing to establish its
commercialization capabilities and may not be able to successfully
commercialize Oxbryta; risks associated with GBT’s dependence on
third parties for research, development, manufacture, distribution,
and commercialization activities; government and third-party payer
actions, including those relating to reimbursement and pricing;
risks and uncertainties relating to competitive treatments and
other changes that may limit demand for Oxbryta; the risks
regulatory authorities may require additional studies or data to
support continued commercialization of Oxbryta; the risks that
drug-related adverse events may be observed during
commercialization or clinical development; data and results may not
meet regulatory requirements or otherwise be sufficient for further
development, regulatory review, or approval; compliance with
obligations under the Pharmakon loan; and the timing and progress
of activities under GBT’s collaboration, license and distribution
agreements; along with those risks set forth in GBT’s Annual Report
on Form 10-K for the fiscal year ended December 31, 2020, and in
GBT’s most recent Quarterly Report on Form 10-Q filed with the U.S.
Securities and Exchange Commission (the “SEC”), as well as
discussions of potential risks, uncertainties, and other important
factors in GBT’s subsequent filings with the SEC. Except as
required by law, GBT assumes no obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events, or otherwise.
Contact: Steven
Immergut (media)650-410-3258simmergut@gbt.com
Courtney
Roberts (investors)650-351-7881croberts@gbt.com
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