Aerie Pharmaceuticals, Inc. (NASDAQ:AERI), an ophthalmic
pharmaceutical company focused on the discovery, development and
commercialization of first-in-class therapies for the treatment of
patients with open-angle glaucoma, retinal diseases and other
diseases of the eye, today announced that it proposes to offer $250
million aggregate principal amount of its convertible senior notes
due 2024 (the “notes”), subject to market conditions and other
factors. The notes are to be offered in a private offering to
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended. Aerie also intends to grant to
the initial purchasers of the notes a 13-day option to purchase up
to an additional $37.5 million aggregate principal amount of the
notes.
The notes will be senior, unsecured obligations of Aerie, and
will bear interest semi-annually in arrears. The notes will mature
on October 1, 2024 unless they are redeemed, repurchased or
converted prior to such date. Prior to April 1, 2024, the notes
will be convertible at the option of holders only during certain
periods and upon satisfaction of certain conditions. On and after
April 1, 2024, the notes will be convertible at the option of the
holders at any time until the close of business on the second
scheduled trading day immediately preceding the maturity date. Upon
conversion, the notes may be settled in shares of Aerie common
stock, cash or a combination thereof, at Aerie’s election.
The interest rate, initial conversion rate, offering price and
other terms of the notes are to be determined by negotiations
between Aerie and the initial purchasers.
Aerie intends to use a portion of the net proceeds from the
offering of the notes to pay the cost of the capped call
transactions described below. If the initial purchasers exercise
their option to purchase additional notes, Aerie intends to use a
portion of the net proceeds from the sale of the additional notes
to pay the cost of entering into additional capped call
transactions. In connection with the offering of the notes, Aerie
intends to terminate its existing senior secured credit facility,
and expects to pay certain termination fees and expenses in
connection with such termination. Aerie expects to use the
remainder of the net proceeds from the offering of the notes for
general corporate purposes, including to fund its commercialization
programs in the United States for both Rhopressa® and Rocklatan®,
its clinical, regulatory and commercialization efforts beyond the
United States, further development of other potential pipeline
opportunities, including activities to support execution of its
retina programs, evaluating possible uses of its existing
proprietary portfolio of molecules beyond ophthalmology, its
external business development efforts and its manufacturing
activities, including the operation of its own manufacturing plant
in Ireland.
In connection with the pricing of the notes, Aerie expects to
enter into privately negotiated capped call transactions with one
or more of the initial purchasers of the notes and/or their
respective affiliates and/or other financial institutions (the
“capped call counterparties”). The capped call transactions are
expected generally to reduce potential dilution to Aerie common
stock upon conversion of the notes and/or offset the potential cash
payments that Aerie could be required to make in excess of the
principal amount of any converted notes upon conversion thereof,
with such reduction and/or offset subject to a cap. If the initial
purchasers exercise their option to purchase additional notes,
Aerie expects to enter into additional capped call transactions
with the capped call counterparties that are expected generally to
offset potential dilution and/or potential cash payments relating
to additional notes issued upon exercise of the option to purchase
additional notes.
In connection with establishing their initial hedges of the
capped call transactions, the capped call counterparties have
advised Aerie that they and/or their respective affiliates expect
to enter into various derivative transactions with respect to Aerie
common stock and/or purchase Aerie 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 Aerie common stock or the notes concurrently with, or shortly
after, the pricing of the notes.
In addition, the capped call counterparties and/or their
respective affiliates may modify their hedge positions by entering
into or unwinding various derivatives with respect to Aerie common
stock and/or purchasing or selling Aerie common stock, the notes or
other of Aerie’s securities or instruments (if any) 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 a note or following
any issuance of a notice of redemption with respect to the notes).
This activity could affect the market price of Aerie common stock
or the notes, which could affect noteholders’ ability to convert
the notes and, to the extent the activity occurs 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.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of these securities (including the shares of
Aerie common stock, if any, into which the notes are convertible)
and shall not constitute an offer, solicitation or sale in any
jurisdiction in which such offer, solicitation or sale is unlawful.
Any offers of the notes (and the shares of Aerie common stock, if
any, into which the notes are convertible) will be made only to
qualified institutional buyers pursuant to Rule 144A promulgated
under the Securities Act of 1933, as amended, by means of a private
offering memorandum.
The offer and sale of the notes and any shares of Aerie common
stock issuable upon conversion of the notes have not been
registered under the Securities Act of 1933, as amended, or any
state securities laws, and the notes and any such shares may not be
offered or sold in the United States absent registration or an
applicable exemption from such registration requirements.
About Aerie Pharmaceuticals, Inc.
Aerie is an ophthalmic pharmaceutical company focused on the
discovery, development and commercialization of first-in-class
therapies for the treatment of patients with open-angle glaucoma,
retinal diseases and other diseases of the eye.
Forward-Looking Statements
This press release contains forward-looking statements for
purposes of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. We may, in some cases, use terms
such as “predicts,” “believes,” “potential,” “proposed,”
“continue,” “estimates,” “anticipates,” “expects,” “plans,”
“intends,” “may,” “could,” “might,” “will,” “should,” “exploring,”
“pursuing” or other words that convey uncertainty of future events
or outcomes to identify these forward-looking statements.
Forward-looking statements include statements regarding our
expectations related to the offering discussed in this press
release, including the completion, timing and size of the offering
and related capped call transactions, and the use of proceeds of
the offering. By their nature, forward-looking statements involve
risks and uncertainties because they relate to events, competitive
dynamics, industry change and other factors beyond our control, and
depend on regulatory approvals and economic and other environmental
circumstances that may or may not occur in the future or may occur
on longer or shorter timelines than anticipated. We discuss many of
these risks in greater detail under the heading “Risk Factors” in
the quarterly and annual reports that we file with the Securities
and Exchange Commission (SEC). Any forward-looking statements that
we make in this press release speak only as of the date of this
press release. We assume no obligation to update our
forward-looking statements whether as a result of new information,
future events or otherwise, after the date of this press
release.
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version on businesswire.com: https://www.businesswire.com/news/home/20190903005852/en/
Media: Tad Heitmann 949-526-8747; theitmann@aeriepharma.com
Investors: Ami Bavishi 908-947-3949; abavishi@aeriepharma.com
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