CARLSBAD, Calif., April 8, 2021 /PRNewswire/ -- Ionis
Pharmaceuticals, Inc. (NASDAQ: IONS) announced today the pricing of
$550.0 million aggregate principal
amount of 0% Convertible Senior Notes due 2026 (the "notes") in a
private placement (the "offering") to qualified institutional
buyers pursuant to Rule 144A under the Securities Act of 1933, as
amended (the "Securities Act"). The aggregate principal amount of
the offering was increased from the previously announced offering
size of $500.0 million. Ionis also
granted the initial purchasers of the notes an option to purchase,
within the 13-day period beginning on, and including, the date on
which the notes are first issued, up to an additional $82.5 million aggregate principal amount of notes
from Ionis. The sale of the notes is expected to close on
April 12, 2021, subject to customary
closing conditions.
The notes will be general unsecured obligations of Ionis, will
not bear regular interest and the principal amount of the notes
will not accrete. The notes will mature on April 1, 2026, unless earlier converted or
repurchased.
Ionis estimates that the net proceeds from the offering will be
approximately $536.2 million (or
approximately $616.8 million if the
initial purchasers exercise their option to purchase additional
notes in full), after deducting the initial purchasers' discounts
and commissions and estimated offering expenses payable by Ionis.
Ionis expects to use approximately $257.0 million of the net proceeds from the
offering to repurchase approximately $247.9
million in aggregate principal amount of its 1% Convertible
Senior Notes due 2021 (the "2021 notes") in privately negotiated
transactions. In addition, Ionis expects to use approximately
$40.8 million of the net proceeds
from the offering to pay the cost of the convertible note hedge
transactions described below (after such cost is partially offset
by the proceeds to Ionis from the sale of the warrant
transactions described below). Ionis expects to use the
remaining net proceeds from the offering for general corporate
purposes, including expansion of manufacturing, research and
development, and commercial infrastructure to support its wholly
owned pipeline.
Before January 1, 2026, holders
will have the right to convert their notes only upon the
satisfaction of specified conditions and during certain periods. On
or after January 1, 2026 until the
close of business on the second scheduled trading day immediately
preceding the maturity date, holders may convert all or any portion
of their notes at any time. Upon conversion, Ionis will pay or
deliver, as the case may be, cash, shares of its common stock or a
combination of cash and shares of its common stock, at its
election. The conversion rate will initially be 17.2902 shares of
Ionis' common stock per $1,000
principal amount of notes (equivalent to an initial conversion
price of approximately $57.84 per
share of Ionis' common stock). The initial conversion price
represents a premium of approximately 32.5% over the last reported
sale price of $43.65 per share of
Ionis' common stock on April 7, 2021.
The conversion rate will be subject to adjustment in some events
but will not be adjusted for any accrued or unpaid special
interest.
Ionis may not redeem the notes prior to the maturity date, and
no sinking fund is provided for the notes.
If Ionis undergoes a "fundamental change" (as defined in the
indenture for the notes), then, subject to certain conditions and
limited exceptions, holders may require Ionis to repurchase for
cash all or any portion of their notes at a fundamental change
repurchase price equal to 100% of the principal amount of the notes
to be repurchased, plus accrued and unpaid special interest, if
any, to, but excluding, the fundamental change repurchase date. In
addition, following certain corporate events that occur prior to
the maturity date, Ionis will, in certain circumstances, increase
the conversion rate for a holder who elects to convert its notes in
connection with such a corporate event.
In connection with the pricing of the notes, Ionis entered
into convertible note hedge transactions with certain of the
initial purchasers or their affiliates and other financial
institutions (the "Option Counterparties"). Ionis also entered into
warrant transactions with the Option Counterparties. The
convertible note hedge transactions are generally expected to
reduce potential dilution to Ionis' common stock upon any
conversion of notes and/or offset any cash
payments Ionis is required to make in excess of the
principal amount of converted notes, as the case may be.
However, the warrant transactions would separately have a dilutive
effect to the extent that the market price per share of Ionis'
common stock exceeds the strike price of any warrants. The strike
price for the warrant transactions will initially be equal to
approximately $76.39 per share, which represents a 75.0%
premium to the closing sale price of Ionis' common stock on
April 7, 2021. If the initial
purchasers exercise their option to purchase additional
notes, Ionis expects to enter into additional convertible
note hedge transactions and additional warrant transactions
relating to the additional notes with the Option
Counterparties.
In connection with establishing their initial hedges of the
convertible note hedge and warrant transactions, Ionis expects that
the Option Counterparties or their respective affiliates will
purchase shares of Ionis' common stock and/or enter into various
derivative transactions with respect to Ionis' 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 Ionis' common stock or the notes at that time.
In addition, the Option Counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to Ionis' common stock
and/or by purchasing or selling Ionis' common stock or other
securities of Ionis 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 notes or in connection with any
repurchase of notes by Ionis on any fundamental change repurchase
date or otherwise). This activity could also cause or avoid an
increase or a decrease in the market price of Ionis' common stock
or the notes, which could affect the ability of noteholders 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.
Further, in connection with any repurchases of the 2021 notes,
Ionis expects that holders of the 2021 notes who agree to have
their 2021 notes repurchased and who have hedged their equity price
risk with respect to such notes (the "hedged holders") will unwind
all or part of their hedge positions by buying Ionis' common stock
and/or entering into or unwinding various derivative transactions
with respect to Ionis' common stock. The amount of Ionis' common
stock to be purchased by the hedged holders may be substantial in
relation to the historic average daily trading volume of Ionis'
common stock. This activity by the hedged holders could increase
(or reduce the size of any decrease in) the market price of Ionis'
common stock, including concurrently with the pricing of the notes,
resulting in a higher effective conversion price of the notes.
Ionis cannot predict the magnitude of such market activity or the
overall effect it may have had on the price of the notes in the
offering or Ionis' common stock.
The notes, the warrants and any shares of common stock issuable
upon conversion of the notes or exercise of the warrants have not
been and will not be registered under the Securities Act, any state
securities laws or the securities laws of any other jurisdiction,
and unless so registered, may not be offered or sold in
the United States absent
registration or an applicable exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act
and other applicable securities laws.
This press release is neither an offer to sell nor a
solicitation of an offer to buy any of these securities 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 thereof under the
securities laws of any such state or jurisdiction.
About Ionis Pharmaceuticals
For more than 30 years, Ionis has been the leader in
RNA-targeted therapy, pioneering new markets and changing standards
of care with its novel antisense technology. Ionis currently has
three marketed medicines and a premier late-stage pipeline
highlighted by industry-leading neurological and cardiometabolic
franchises. Our scientific innovation began and continues with the
knowledge that sick people depend on us, which fuels our vision of
becoming one of the most successful biotechnology companies.
Ionis' Forward-looking Statement
This press release includes forward-looking statements regarding
the offering and the convertible note hedge and warrant
transactions, including statements regarding the anticipated
completion and timing of the offering and the convertible note
hedge and warrant transactions and Ionis' expected use of proceeds
from the offering. Any statement describing Ionis' expectations,
intentions or beliefs is a forward-looking statement and should be
considered an at-risk statement. Such statements are subject to
certain risks and uncertainties, including, without limitation,
changes in market conditions, whether Ionis will be able to satisfy
closing conditions related to the offering, whether and on what
terms Ionis may repurchase any of the 2021 notes and unanticipated
uses of capital. Ionis' forward-looking statements also involve
assumptions that, if they never materialize or prove correct, could
cause its results to differ materially from those expressed or
implied by such forward-looking statements. Although Ionis'
forward-looking statements reflect the good faith judgment of its
management, these statements are based only on facts and factors
currently known by Ionis. As a result, you are cautioned not to
rely on these forward-looking statements. These and other risks
concerning Ionis' programs are described in additional detail in
Ionis' annual report on Form 10-K for the year ended December 31, 2020, which is on file with the
Securities and Exchange Commission. Copies of these and other
documents are available from the Company.
In this press release, unless the context requires otherwise,
"Ionis," "Company," "we," "our," and "us" refers to Ionis
Pharmaceuticals and its subsidiaries.
Ionis Pharmaceuticals® is a trademark of Ionis
Pharmaceuticals, Inc.
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SOURCE Ionis Pharmaceuticals, Inc.