Intercept Pharmaceuticals Announces Repurchase of Convertible Notes
August 19 2022 - 7:30AM
Intercept Pharmaceuticals, Inc. (Nasdaq: ICPT) (“Intercept”),
a biopharmaceutical company focused on the development and
commercialization of novel therapeutics to treat progressive
non-viral liver diseases, announced today that it has entered into
privately negotiated agreements to repurchase $327.9 million of its
secured convertible debt using a combination of cash and equity.
The repurchase is expected to close promptly, subject to and
following customary closing conditions.
This action is the most recent in a series of strategic
financial moves undertaken by the Company over the past 12 months
to improve its capital structure. This repurchase decreases
Intercept’s total outstanding debt by 45% and will be accretive to
existing shareholders by reducing its potential share dilution by
6.3 million shares. In addition, it will help enable the Company to
focus on its strategic priorities of delivering continued growth of
its PBC franchise, supporting its NDA resubmission and potential
launch of obeticholic acid in non-alcoholic steatohepatitis (NASH),
and advancing its pipeline.
The agreements were made for the Company’s 3.50% Convertible
Senior Secured Notes due 2026 (the “2026 Notes”) which had a
principal amount of $500 million with 23.9 million underlying
shares. In line with the target acceptance amount set out by
Intercept at launch, the Company accepted for purchase an aggregate
principal amount of $327.9 million for consideration of $222.0
million cash and 9.4 million shares. There were 15.7 million shares
underlying the $327.9 million principal amount corresponding to a
potential savings of 6.3 million shares of dilution. It is
Intercept’s expectation that the shares delivered to investors will
be used to cover investors’ existing hedge positions in respect of
the 2026 Notes.
Net of this repurchase, the principal balance of the 2026 Notes
has been reduced from $500.0 million to $172.1 million,
and annual interest expense will be reduced by $11.5 million to
$6.0 million. Following completion of these transactions,
Intercept’s cash position will be in excess of $500.0 million with
39.4 million shares outstanding.
The shares of Intercept’s common stock being issued have not
been, and will not be, registered under the Securities Act of 1933,
or any state securities laws, and may not be offered or sold in the
United States absent registration or an applicable exemption from
(or in a transaction not subject to) registration requirements.
This press release shall not constitute an offer to sell or a
solicitation of an offer to buy Intercept’s common stock, or any
other securities, and will not constitute an offer, solicitation,
or sale in any state or jurisdiction in which such an offer,
solicitation, or sale would be unlawful.
About InterceptIntercept is a biopharmaceutical
company focused on the development and commercialization of novel
therapeutics to treat progressive non-viral liver diseases,
including primary biliary cholangitis (PBC) and nonalcoholic
steatohepatitis (NASH). For more information, please
visit www.interceptpharma.com or connect with the company
on Twitter and LinkedIn.
Forward-Looking StatementsThis press release
contains forward-looking statements (“FLS”), including regarding:-
Closing of the transaction, and timing thereof.- Intercept’s
financial position, including cash position and interest expense.-
Shareholder dilution and savings in potential dilution related to
convertible bonds and retirement of such bonds.- Bondholder
intentions and hedging and investment strategy, including use of
Intercept shares to cover existing hedge positions.- Accretion of
value to shareholders.- Intercept’s focus on strategic priorities,
including growth of its PBC franchise, support of its NDA
resubmission, potential launch of obeticholic acid in NASH, and
pipeline development.
Important factors could cause actual results to differ
materially from the FLS, including:- Intercept’s and the
bondholders’ satisfaction of contractual terms, including
representations and warranties and closing conditions.- Intercept’s
management of its business, including focus on strategic
priorities, and financial and cash management.- Performance of
Intercept’s stock price, the value of Intercept’s convertible
bonds, and whether bondholders seek to convert their bonds into
stock.- Bondholder behavior, including hedging and unwinding of
hedges.- The other factors regarding FLS and the other risks
identified in Intercept’s periodic SEC filings, including our
latest Annual Report on Form 10-K and Quarterly Report on Form
10-Q.
Contact For more information about Intercept,
please contact:
For investors: Nareg Sagherian, Executive Director, Global
Investor Relations Investors@interceptpharma.com
For media: Karen Preble, Executive Director, Global
Corporate Communications Media@interceptpharma.com
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