The Company plans to purchase up to
$200 million worth of shares
concurrently with, or shortly after, the pricing of the
offering
SAN
DIEGO, Aug. 15, 2022 /PRNewswire/
-- Halozyme Therapeutics, Inc. (NASDAQ: HALO) ("Halozyme" or
the "Company"), a leader in converting IV biologics to subcutaneous
delivery and autoinjector devices, today announced that it intends
to offer, subject to market conditions and other factors,
$500 million aggregate principal
amount of convertible senior notes due 2028 (the "Convertible
Notes"). The Convertible Notes are to be offered and sold to
"qualified institutional buyers" pursuant to Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"). The
Company also expects to grant a 13-day option to the initial
purchasers to purchase up to an additional $75 million aggregate principal amount of
Convertible Notes.
The Convertible Notes will be senior, unsecured obligations of
the Company and will accrue interest payable semi-annually in
arrears. The Convertible Notes will mature on August 15, 2028, unless earlier redeemed,
repurchased or converted in accordance with their terms prior to
such date. Prior to the close of business on the business day
immediately preceding February 15,
2028, the Convertible Notes will be convertible only upon
the satisfaction of certain conditions and during certain periods,
and on and after February 15, 2028,
at any time prior to the close of business on the second scheduled
trading day immediately preceding the maturity date, the
Convertible Notes will be convertible regardless of these
conditions. The Company will settle conversions in cash and, if
applicable, shares of the Company's common stock. The initial
conversion rate, interest rate and other terms of the Convertible
Notes will be determined at the time of pricing in negotiations
with the initial purchasers of the Convertible Notes.
In connection with the offering, the Company intends to enter
into privately negotiated capped call transactions with option
counterparties that may include one or more of the initial
purchasers and/or their affiliates and/or other institutions. If
the initial purchasers exercise their option to purchase additional
notes, the Company may enter into additional capped call
transactions with the option counterparties. The capped call
transactions are generally expected to reduce potential dilution to
the Company's common stock upon conversion of the convertible notes
and/or offset any cash payments the Company is required to make in
excess of the principal amount of converted notes, as the case may
be.
The Company has been advised that, in connection with
establishing their initial hedges of the capped call transactions,
the option counterparties and/or their affiliates (i) expect to
purchase shares of the Company's common stock and/or enter into
derivative transactions with respect to the Company's common stock
concurrently with, or shortly after, the pricing of the Convertible
Notes and (ii) may modify their hedge positions by entering into or
unwinding derivative transactions with respect to the Company's
common stock and/or purchasing or selling the Company's common
stock or other securities of the Company in secondary market
transactions following the pricing of the Convertible Notes and
prior to the maturity of the Convertible Notes. These activities
could have the effect of increasing, or preventing a decline in,
the market price of the Company's common stock concurrently with,
or shortly following, the pricing of the Convertible Notes. The
effect, if any, of these activities, including the direction or
magnitude, on the market price of the Company's common stock will
depend on a variety of factors, including market conditions, and
cannot be ascertained at this time. Any of these activities could,
however, adversely affect the market price of the Company's common
stock.
The Company expects to use a portion of net proceeds of the
offering to fund the cost of entering into the capped call
transactions. The Company also 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 pricing of the proposed offering (the "Note
Repurchases").
In parallel to this transaction, the Company expects to use a
portion of the net proceeds of the offering for the repurchase of
shares of its common stock (the "Share Repurchases") up to
$200 million, concurrently with, or
shortly after, the pricing of the offering in privately negotiated
transactions or otherwise, which may be effected through one or
more of the initial purchasers or any affiliate thereof.
The Share Repurchases, if consummated in full, would represent
an increase of $100 million of the
previously planned share repurchases to be made in 2022 under the
Company's ongoing three-year $750
million share repurchase program, which was commenced and
previously announced in 2021.
Further, the Company expects to use a portion of the net
proceeds of the offering to repay all of its outstanding
$250 million term loan facility due
2026. 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
the existing stock repurchase program, working capital, capital
expenditures, potential acquisitions and strategic transactions. If
the initial purchasers exercise their option to purchase additional
notes, the Company intends to use a portion of the net proceeds
from the sale of additional notes to fund the cost of entering into
additional capped call transactions.
The 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 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 also
result in a higher effective conversion price for the Convertible
Notes.
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 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 disclaims 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 offer the notes or
consummate the offering; and the anticipated terms of the notes 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, 2021 and the Company's Quarterly
Reports on Form 10-Q for the quarters ended March 31, 2022 and June
30, 2022, which are filed with the Securities and Exchange
Commission.
About Halozyme Therapeutics, Inc.
Halozyme is a biopharmaceutical company bringing disruptive
solutions to significantly improve patient experiences and outcomes
for emerging and established therapies. As the innovators of the
ENHANZE® technology with the proprietary enzyme rHuPH20,
Halozyme's commercially-validated solution is used to facilitate
the delivery of injected drugs and fluids in order to reduce the
treatment burden to patients. Having touched more than 600,000
patient lives in post-marketing use in five commercialized products
across more than 100 global markets, Halozyme has licensed its
ENHANZE® technology to leading pharmaceutical and
biotechnology companies including Roche, Baxalta, Pfizer, AbbVie,
Eli Lilly, Bristol-Myers Squibb, Alexion, argenx, Horizon
Therapeutics, ViiV Healthcare and Chugai Pharmaceutical.
Halozyme also develops, manufactures and commercializes, for
itself or with partners, drug-device combination products using its
advanced auto-injector technology that are designed to provide
commercial or functional advantages such as improved convenience
and tolerability, and enhanced patient comfort and adherence. The
Company has a commercial portfolio of proprietary products
including XYOSTED®, TLANDO™ and NOCDURNA® and
partnered commercial products and ongoing product development
programs with industry leading pharmaceutical companies including
Teva Pharmaceutical, Covis Pharma, Pfizer and Idorsia
Pharmaceuticals.
Halozyme is headquartered in San
Diego, CA and has offices in Ewing, NJ and Minnetonka, MN. Minnetonka is also the site of its operations
facility.
Contacts:
Tram Bui
VP, Investor Relations and Corporate Communications
609-359-3016
tbui@antarespharma.com
Dawn Schottlandt / Claudia Styslinger
Argot Partners
212-600-1902
Halozyme@argotpartners.com
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SOURCE Halozyme Therapeutics, Inc.