Clovis Oncology, Inc. (NASDAQ: CLVS)
announced today that on November 4, 2020 it entered into a
privately negotiated exchange and purchase agreement (the
“Agreement”) with a holder of its currently outstanding 4.50%
Convertible Senior Notes due 2024 (the “Existing 2024 Notes”).
Pursuant to the Agreement, in exchange for $64,842,000 aggregate
principal amount of Existing 2024 Notes held by the holder (which
is currently convertible into approximately 8.9 million shares of
common stock), Clovis Oncology has agreed to issue to the holder a
number of shares of the Company’s common stock (the “Exchanged
Shares”) utilizing an exchange ratio that is based in part on the
daily volume-weighted average prices (“VWAPs”) per share of Clovis
Oncology’s common stock during a seven-trading day pricing period
following execution of the Agreement.
In addition, pursuant to the
Agreement, Clovis Oncology has also agreed to sell to the holder
$50,000,000 aggregate principal amount of a new series of 4.50%
Convertible Senior Notes due 2024 (the “New 2024 Notes”) at a
purchase price of $1,000 per $1,000 principal amount thereof. Also,
Clovis Oncology has granted the holder a 13-day option to purchase
up to an additional $20,000,000 aggregate principal amount of New
2024 Notes on the same terms and conditions.
About the Debt Exchange
The number of Exchanged Shares to be
issued by Clovis Oncology to the holder will be calculated
utilizing an exchange ratio that is based in part on the average
VWAPs of Clovis Oncology’s common stock (subject to a floor) during
a seven-trading day pricing period beginning on November 5, 2020
and ending on, and including, November 13, 2020. Assuming such
average VWAP is $5.67 per share, which is the last reported sale
price of Clovis Oncology’s common stock on the Nasdaq Global Select
Market on November 4, 2020, 13,038,683 Exchanged Shares would be
issuable pursuant to the debt exchange transaction. However, in the
event that Clovis Oncology’s stock price declines during the
pricing period, Clovis Oncology will be required to issue more
shares, but in no event more than 15,696,240 Exchanged Shares are
issuable pursuant to the debt exchange transaction.
About the New 2024 Notes
The New 2024 Notes will bear interest at a rate of 4.50% per
annum, payable semi-annually in arrears on February 1st and August
1st of each year. The New 2024 Notes will mature on August 1, 2024
unless earlier converted or repurchased. The holders of the New
2024 Notes may convert their notes at their option at any time
prior to the close of business on the business day immediately
preceding the maturity date at an initial conversion rate of
160.3334 shares of Clovis Oncology’s common stock per $1,000
principal amount of notes, which is equivalent to an initial
conversion price of approximately $6.24 per share of common stock.
The initial conversion price of the notes represents a premium of
approximately 10% to the last reported sale price, $5.67 per share,
of Clovis Oncology’s common stock on November 4, 2020.
Clovis Oncology will not have the right to redeem the New 2024
Notes prior to their maturity. Holders of the New 2024 Notes may
require Clovis Oncology to repurchase for cash all or part of their
notes upon certain fundamental changes at a repurchase price equal
to 100% of the principal amount of the New 2024 Notes to be
repurchased, plus accrued and unpaid interest to, but excluding,
the fundamental change repurchase date. In addition, following
certain corporate events that occur prior to the maturity date,
Clovis Oncology will, in certain circumstances, increase the
conversion rate for a holder who elects to convert its New 2024
Notes in connection with such corporate event.
The above summary of the terms of the New 2024 Notes is
qualified in its entirety by and should be read with the Indenture
governing the New 2024 Notes, the form of which is anticipated to
be filed with the Securities and Exchange Commission on or about
November 5, 2020.
Clovis Oncology intends to use the net proceeds from the sale of
the New 2024 Notes for general corporate purposes, including
repayment, repurchase or refinance of its debt obligations, sales
and marketing expenses associated with Rubraca® (rucaparib),
funding of its development programs, payment of milestones pursuant
to its license agreements, general and administrative expenses,
acquisition or licensing of additional product candidates or
businesses and working capital.
The issuance of the Exchanged Shares, the New 2024 Notes in the
transaction and any shares of common stock issuable upon conversion
of such New 2024 Notes have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”), or any
state securities law, and, unless so registered, the New 2024 Notes
and any such shares may not be offered or sold in the United States
except pursuant to an applicable exemption from the registration
requirements of the Securities Act and applicable state securities
laws. Clovis Oncology has agreed to file a registration statement
for the resale of the shares of common stock issuable upon the
conversion of the New 2024 Notes purchased by the holder. This
press release does not constitute an offer to sell, or a
solicitation of an offer to buy, any security and shall not
constitute an offer, solicitation or sale in any jurisdiction in
which such offering would be unlawful.
About the Settlement of the
Transactions
The exchange and purchase transaction will settle in two parts.
Approximately 8.9 million of the Exchanged Shares are expected to
be issued on or about November 6, 2020 and the remainder will be
issued within two business days following the seven-trading day
pricing period and the final calculation of the exchange ratio,
which is expected to occur on or about November 17, 2020. The sale
of the New 2024 Notes is expected to occur on or about November 17,
2020. In each case, the settlement of the exchange and purchase
transaction is subject to the satisfaction of customary closing
conditions.
J.P. Morgan and BofA Securities acted as structuring banks to
Clovis Oncology in connection with the transactions.
About Clovis Oncology
Clovis Oncology, Inc. is a biopharmaceutical company focused on
acquiring, developing and commercializing innovative anti-cancer
agents in the U.S., Europe and additional international markets.
Clovis Oncology targets development programs at specific subsets of
cancer populations, and simultaneously develops, with partners, for
those indications that require them, diagnostic tools intended to
direct a compound in development to the population that is most
likely to benefit from its use. Clovis Oncology is headquartered in
Boulder, Colorado with additional office locations in the U.S. and
Europe.
To the extent that statements contained in this press release
are not descriptions of historical facts regarding Clovis Oncology,
they are forward-looking statements reflecting the current beliefs
and expectations of management. Such forward-looking statements
involve substantial risks and uncertainties that could cause Clovis
Oncology’s actual results, performance or achievements to differ
significantly from those expressed or implied by the
forward-looking statements. Such risks and uncertainties include,
among others, the conditions affecting the capital markets, general
economic, industry, or political conditions, and the satisfaction
of customary closing conditions related to the proposed exchange
and purchase transaction. Clovis Oncology undertakes no obligation
to update or revise any forward-looking statements. For a further
description of the risks and uncertainties that could cause actual
results to differ from those expressed in these forward-looking
statements, as well as risks relating to the business of the
company in general, see Clovis Oncology’s Annual Report on Form
10-K, Quarterly Reports on Form 10-Q and its other reports filed
with the Securities and Exchange Commission.
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version on businesswire.com: https://www.businesswire.com/news/home/20201105005401/en/
Anna Sussman 303.625.5022 asussman@clovisoncology.com
Breanna Burkart 303.625.5023 bburkart@clovisoncology.com
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