SAN
DIEGO, Aug. 15, 2022 /PRNewswire/ -- Halozyme
Therapeutics, Inc. (NASDAQ: HALO) ("Halozyme" or the "Company"), a
leader in converting IV biologics to subcutaneous delivery, today
announced the pricing of $625.0
million aggregate principal amount of convertible senior
notes due 2028 (the "Convertible Notes"). The Convertible Notes are
being offered and sold to "qualified institutional buyers" pursuant
to Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"). The offering was upsized from an originally
announced $500 million in aggregate
principal amount. The Company also granted a 13-day option to the
initial purchasers to purchase up to an additional $95.0 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 at an annual rate of 1.00%. The Convertible Notes have an
initial conversion rate of 17.8517 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 $56.02 per
share of the Company's common stock, representing an initial
conversion premium of approximately 30% above the closing price of
$43.09 per share of the Company's
common stock on August 15, 2022). 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 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 Company expects to close the offering
on August 18, 2022, subject to the
satisfaction of various customary closing conditions.
In connection with the pricing of the Convertible Notes, the
Company entered into capped call transactions with certain of the
initial purchasers of the Convertible Notes and/or their respective
affiliates and/or other financial institutions (collectively, the
"Capped Call Counterparties"). The capped call transactions are
expected generally to reduce potential dilution to holders of the
Company's common stock on any conversion of the Convertible Notes
or at the Company's election (subject to certain conditions) offset
any cash payments the Company is required to make in excess of the
principal amount of any such converted Convertible Notes, as the
case may be, with such reduction or offset subject to a cap based
on the cap price. The cap price of the capped call transactions is
initially $75.41 per share of the
Company's common stock, representing a premium of 75% above the
last reported sale price of $43.09
per share of the Company's common stock on August 15, 2022, and is subject to certain
adjustments under the terms of the capped call transactions.
In connection with establishing their initial hedges of the
capped call transactions, the Capped Call Counterparties or their
respective affiliates may purchase shares of the Company's common
stock or enter into various derivative transactions with respect to
the Company's common stock concurrently with, or shortly after, the
pricing of the Convertible Notes. This activity could increase (or
reduce the size of any decrease in) the market price of the
Company's common stock or the Convertible Notes at that time.
In addition, the Capped Call Counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to the Company's common
stock or purchasing or selling the Company's common stock in
secondary market transactions following the pricing of the
Convertible Notes and prior to the maturity of the Convertible
Notes (and are likely to do so during the relevant valuation period
under the capped call transactions or following any early
conversion of the Convertible Notes or repurchase of the
Convertible Notes by the Company on any fundamental change
repurchase date, any redemption date or otherwise, in each case if
the Company exercises its option to terminate the relevant portion
of the capped call transactions). This activity could also cause or
avoid an increase or decrease in the market price of the Company's
common stock or the Convertible Notes, which could affect
noteholders' ability to convert the Convertible Notes and, to the
extent the activity occurs during any observation period related to
a conversion of the Convertible Notes, it could affect the amount
and value of the consideration that noteholders will receive on
conversion of such Convertible Notes.
The Company will receive net proceeds from the offering of
approximately $608.7 million (or
approximately $701.4 million if the
initial purchasers exercise their option to purchase additional
Convertible Notes in full). The Company expects to use
approximately $60.0 million of the
net proceeds of the offering to fund the cost of entering into the
capped call transactions. The Company also expects to use
approximately $77.6 million 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
$77.6 million in cash, which includes
accrued interest, and issue approximately 1.51 million shares of
its common stock, to settle such exchanges. In addition, the
Company expects to use a portion of the net proceeds of the
offering to repurchase shares of its common stock (the "Share
Repurchases") up to $200 million,
concurrently with, or shortly after, the offering in privately
negotiated transactions or otherwise, which may be effected through
one or more of the initial purchasers or an affiliate thereof. The
Company anticipates using approximately $90.0 million of the net proceeds of the offering
to repurchase approximately 2.09 million of its shares concurrently
with the closing of the Convertible Notes offering on August 18, 2022, with the remaining Share
Repurchases thereafter. 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 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.
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 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.
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 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, 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.