Acorda Therapeutics Announces Private Exchange of $276 Million of Its 1.75% Convertible Senior Notes Due 2021
December 23 2019 - 5:30AM
Business Wire
Acorda Therapeutics, Inc. (Nasdaq: ACOR) (the “Company”) today
announced that it has entered into agreements with a limited number
of institutional investors who are holders of the Company’s 1.75%
Convertible Senior Notes due 2021 (the “Existing Convertible
Notes”) to exchange $276 million aggregate principal amount of the
Existing Convertible Notes for a combination of newly issued 6.00%
Convertible Senior Secured Notes due 2024 (the “New Convertible
Secured Notes”) and cash. For each $1,000 principal amount of
Existing Convertible Notes that a participating holder exchanges,
the Company will deliver (i) $750 in principal amount of New
Convertible Secured Notes and (ii) a cash payment of $200 (the
“Exchange”). In the aggregate, the Company expects to issue
approximately $207 million aggregate principal amount of New
Convertible Secured Notes and $55.2 million in cash to the
participating holders. The Exchange is expected to close on or
about December 23, 2019.
The New Convertible Secured Notes will be guaranteed by the
Company’s wholly owned subsidiary, Civitas Therapeutics, Inc., and
all other domestic subsidiaries acquired or formed after the date
of issuance (the “Guarantors”), and will be senior obligations of
the Company and the Guarantors, secured by a first priority
security interest in substantially all of the assets of the Company
and the Guarantors, subject to certain exceptions. Interest will be
payable semi-annually in arrears at a rate of 6.00% per annum on
each June 1 and December 1, beginning on June 1, 2020, and may be
paid in cash or, subject to the satisfaction of certain conditions,
shares of the Company’s common stock, as elected by the Company.
The New Convertible Secured Notes will mature on December 1, 2024
unless earlier converted in accordance with their terms prior to
such date.
The New Convertible Secured Notes will be convertible at the
option of the holder into shares of common stock of the Company at
any time prior to the close of business on the second scheduled
trading day immediately preceding the maturity date. The initial
conversion rate for the New Convertible Secured Notes is 285.7142
shares of the Company’s common stock per $1,000 principal amount of
New Convertible Secured Notes, which is equivalent to an initial
conversion price of approximately $3.50 per share of common stock
(a premium of approximately 97% above the Company’s closing stock
price of $1.78 on December 20, 2019), and is subject to adjustment
in certain circumstances.
The Company may elect to settle conversions of the New
Convertible Secured Notes in cash, shares of the Company’s common
stock or a combination of cash and shares of the Company's common
stock. Holders who convert their New Convertible Secured Notes
prior to June 1, 2023 (other than in connection with a fundamental
change) will also be entitled to an interest make-whole payment
equal to the sum of all regularly scheduled stated interest
payments, if any, due on such New Convertible Secured Notes on each
interest payment date occurring after the conversion date for such
conversion and on or before June 1, 2023. In addition, the Company
will have the right to cause all New Convertible Secured Notes then
outstanding to be converted automatically if the volume-weighted
average price per share of the Company’s common stock equals or
exceeds 130% of the conversion price for a specified period of time
and certain other conditions are satisfied. The Company’s ability
to settle conversions and make interest payments using shares of
its common stock will be subject to certain limitations set forth
in the indenture until the time, if any, that the Company’s
stockholders approve the issuance of more than 19.99% of its
outstanding shares for such purposes in accordance with Nasdaq
listing standards and an amendment to the Company’s certificate of
corporation to increase the number of authorized shares.
Holders of the New Convertible Secured Notes will have the
right, at their option, to require the Company to purchase their
New Convertible Secured Notes if a fundamental change (as defined
in the indenture) occurs, in each case, at a repurchase price equal
to 100% of the principal amount of the New Convertible Secured
Notes to be repurchased, plus accrued and unpaid interest, if any,
to, but excluding, the applicable repurchase date.
In connection with the exchange, the Company intends to enter
into an indenture establishing the terms of the New Convertible
Secured Senior Notes, a security agreement establishing a first
priority security interest in substantially all of the assets of
the Company and Guarantors, subject to certain material exceptions
specified therein, and a registration rights agreement under which
the Company has agreed to file a registration statement covering
the resale of the shares of common stock issued upon conversion of
the New Convertible Secured Notes.
This press release does not constitute an offer to sell or
the solicitation of an offer to buy any securities of the Company.
The offer and sale of the New Convertible Secured Notes or the
shares of common stock issuable upon their conversion have not been
registered under the Securities Act of 1933 (the “Securities Act”)
or the securities laws of any other jurisdiction, and these
securities may not be offered or sold in the United States absent
registration or an applicable exemption from the Securities Act and
applicable state laws.
J. Wood Capital Advisors LLC is acting as the Company’s
financial advisor for the Exchange and Covington & Burling LLP
is acting as the Company’s legal advisor.
About Acorda Therapeutics
Acorda Therapeutics develops therapies to restore function and
improve the lives of people with neurological disorders. INBRIJA™
(levodopa inhalation powder) is approved for intermittent treatment
of OFF episodes in adults with Parkinson’s disease treated with
carbidopa/levodopa. INBRIJA is not to be used by patients who take
or have taken a nonselective monoamine oxidase inhibitor such as
phenelzine or tranylcypromine within the last two weeks. INBRIJA
utilizes Acorda’s innovative ARCUS® pulmonary delivery system, a
technology platform designed to deliver medication through
inhalation. Acorda also markets the branded AMPYRA® (dalfampridine)
Extended Release Tablets, 10 mg.
Forward-Looking Statements
This press release includes forward-looking statements. All
statements, other than statements of historical facts, regarding
management's expectations, beliefs, goals, plans or prospects
should be considered forward-looking. These statements are subject
to risks and uncertainties that could cause actual results to
differ materially, including: we may not be able to successfully
market INBRIJA or any other products under development; risks
associated with complex, regulated manufacturing processes for
pharmaceuticals, which could affect whether we have sufficient
commercial supply of INBRIJA to meet market demand; third party
payers (including governmental agencies) may not reimburse for the
use of INBRIJA or our other products at acceptable rates or at all
and may impose restrictive prior authorization requirements that
limit or block prescriptions; competition for INBRIJA, AMPYRA and
other products we may develop and market in the future, including
increasing competition and accompanying loss of revenues in the
U.S. from generic versions of AMPYRA (dalfampridine) following our
loss of patent exclusivity; the ability to realize the benefits
anticipated from acquisitions, among other reasons because acquired
development programs are generally subject to all the risks
inherent in the drug development process and our knowledge of the
risks specifically relevant to acquired programs generally improves
over time; we may need to raise additional funds to finance our
operations and may not be able to do so on acceptable terms; the
risk of unfavorable results from future studies of INBRIJA
(levodopa inhalation powder) or from our other research and
development programs, or any other acquired or in-licensed
programs; the occurrence of adverse safety events with our
products; the outcome (by judgment or settlement) and costs of
legal, administrative or regulatory proceedings, investigations or
inspections, including, without limitation, collective,
representative or class action litigation; failure to protect our
intellectual property, to defend against the intellectual property
claims of others or to obtain third party intellectual property
licenses needed for the commercialization of our products; and
failure to comply with regulatory requirements could result in
adverse action by regulatory agencies.
These and other risks are described in greater detail in our
filings with the Securities and Exchange Commission. We may not
actually achieve the goals or plans described in our
forward-looking statements, and investors should not place undue
reliance on these statements. Forward-looking statements made in
this press release are made only as of the date hereof, and we
disclaim any intent or obligation to update any forward-looking
statements as a result of developments occurring after the date of
this press release.
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version on businesswire.com: https://www.businesswire.com/news/home/20191223005108/en/
Felicia Vonella (914) 326-5146 fvonella@acorda.com
Acorda Therapeutics (NASDAQ:ACOR)
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