Sarepta Therapeutics, Inc. (SRPT), a company focused on rare diseases, on Wednesday announced the pricing of $980 million of convertible senior notes that will mature on September 15, 2027.
In addition, the firm allowed the initial purchasers to buy up to an additional $150 million of notes, with an expected settlement on September 16.
The drug maker noted that an entity affiliated with a member of Sarepta's Board has agreed to purchase $20 million notes in a separate concurrent private placement.
Sarepta expects net proceeds from the offerings to be around $979.4 million or $1.1 billion, if the initial purchasers' option to buy extra shares is exercised in full.
"With current cash and projected revenue, offering is expected to fund operations to profitability," the company said in a statement.
The notes will be senior, unsecured obligations of Sarepta and bear cash interest at a rate of 1.25 percent, payable on March 15 and September 15 of each year, beginning on March 15, 2023.
The initial conversion rate for the notes is 7.0439 shares of Sarepta's common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $141.97 per share of Sarepta's common stock.
The company intends to use $110.7 million of the net proceeds to pay the cost of the capped call transactions, and approximately $248.3 million to repurchase around $150.6 million of its 1.50 percent convertible senior notes due 2024.
The company has agreed with certain holders of its 2024 notes to repurchase around $150.6 million of the 2024 notes for approximately $248.3 million in cash. Sarepta intends to use approximately $585.5 million of the net proceeds from the offerings to repay borrowings.
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