Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN) (the “Company”), a
specialty pharmaceutical company focused on developing and
commercializing products for the treatment of central nervous
system diseases, announced today the pricing of its private
offering of $350 million aggregate principal amount of 0.625%
Convertible Senior Notes due 2023 (the “Notes”) to be sold to
qualified institutional buyers in reliance on Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"). The
Company has granted the initial purchasers of the Notes a 30-day
option to purchase up to an additional $52.5 million aggregate
principal amount of Notes. The offering is expected to close on
March 19, 2018, subject to customary closing conditions.
The Notes will be the Company’s unsecured obligations,
effectively subordinated in right of payment to any secured senior
indebtedness of the Company and structurally subordinated to all
future indebtedness of the Company’s subsidiaries. The Notes will
pay interest semi-annually in cash on April 1 and October 1 of each
year at a rate of 0.625% per year, commencing October 1, 2018. The
Notes will mature on April 1, 2023, unless earlier repurchased or
converted.
The Company estimates that the net proceeds from the offering of
the Notes will be approximately $340.2 million (or approximately
$391.3 million if the initial purchasers exercise their option to
purchase additional Notes in full), after deducting the initial
purchasers’ discount and estimated offering expenses. The Company
expects to use the net proceeds to acquire or invest in
complementary businesses, companies, products and technologies and
for working capital and other general corporate purposes, including
without limitation, capital expenditures and research and
development activities for potentially acquired or in-licensed
product candidates, after applying approximately $23.7 million (or
approximately $27.2 million if the initial purchasers exercise in
full their option to purchase additional Notes) of the net proceeds
from the offering of the Notes to fund the cost of the convertible
note hedge transactions with the hedge counterparties, as described
below (after such cost is partially offset by the proceeds to the
Company from the separate sale of the warrants described
below).
The holders of the Notes will have the ability to require the
Company to repurchase all or any portion of their Notes for cash in
the event of a “fundamental change” (as defined in the indenture
governing the Notes). In such case, the repurchase price would be
100% of the principal amount of the Notes being repurchased plus
any accrued and unpaid interest.
Prior to October 1, 2022, the Notes will be convertible only
upon the occurrence of certain events and during certain periods,
and thereafter, at any time until the close of business on the
second scheduled trading day preceding the maturity date of the
Notes. The Notes will be convertible based on an initial conversion
rate of 16.8545 shares of the Company’s common stock per $1,000
principal amount of the Notes, which is equivalent to an initial
conversion price of approximately $59.33 per share, which
represents a conversion premium of approximately 37.5% to the last
reported sale price of $43.15 per share of the Company’s common
stock on The NASDAQ Global Market on March 14, 2018. In addition,
following certain corporate transactions that may occur prior to
the maturity date, the Company will, in certain circumstances,
increase the conversion rate for a specified period of time. Upon
any conversion, the Company’s conversion obligation will be settled
in cash, shares of the Company’s common stock, or a combination of
cash and shares of the Company’s common stock, at the Company’s
election.
In connection with the offering of the Notes, the Company has
entered into privately negotiated convertible note hedge
transactions with one or more of the initial purchasers of the
Notes or their respective affiliates and/or other financial
institutions (the “Hedge Counterparties”). The convertible note
hedge transactions cover the number of shares of the Company’s
common stock that will initially underlie the Notes, subject to
customary anti-dilution adjustments. The Company also entered into
separate privately negotiated warrant transactions with the Hedge
Counterparties relating to the same number of shares of the
Company’s common stock, subject to customary anti-dilution
adjustments. The strike price of the warrant transactions will
initially be approximately $80.91 per share, which represents an
87.5% premium to the last reported sale price of the Company’s
common stock on The NASDAQ Global Market on March 14, 2018. In
addition, if the initial purchasers exercise their option to
purchase additional Notes, the Company expects to sell additional
warrants to the Hedge Counterparties and use a portion of the
proceeds from the sale of the additional Notes and from the sale of
the additional warrants to enter into additional convertible note
hedge transactions with the Hedge Counterparties. The convertible
note hedge transactions are expected generally to reduce the
potential dilution with respect to the Company’s common stock
and/or reduce the amount of any potential cash payments the Company
is required to make in excess of the principal amount of any
converted Notes upon conversion of the Notes. However, the warrant
transactions could separately have a dilutive effect with respect
to the Company’s common stock to the extent that the market price
per share of the Company’s common stock exceeds the applicable
strike price of the warrants on any expiration date of the
warrants.
In connection with establishing their initial hedges of the
convertible note hedge transactions and warrant transactions,
concurrently with, or shortly after, the pricing of the Notes, the
Hedge Counterparties or their respective affiliates expect to enter
into various derivative transactions with respect to the Company’s
common stock and/or purchase shares of the Company’s common stock,
and shortly after the pricing of the Notes, may purchase the
Company’s common stock in secondary market transactions. These
activities could have the effect of increasing, or reducing the
size of a decline in, the market price of the Company’s common
stock concurrently with, or shortly following, the pricing of the
Notes. In addition, the Hedge Counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivative transactions with respect to the
Company’s common stock and/or by purchasing or selling the
Company’s common stock or other securities of the Company,
including the Notes, in open market transactions and/or privately
negotiated transactions following the pricing of the Notes from
time to time (and are likely to do so during any “observation
period” (as defined in the indenture governing the Notes) related
to a conversion of Notes). Any of these hedging activities could
adversely affect the market price of the Company’s common stock or
the Notes.
The offer and sale of the Notes and the shares of the Company’s
common stock issuable upon conversion thereof, if any, have not
been and will not be registered under the Securities Act or
applicable state securities laws, and the Notes and such shares may
not be offered or sold in the United States or to U.S. persons
except pursuant to an exemption from the registration requirements
of the Securities Act and applicable state securities laws.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy these securities, nor shall there
be any sale of these securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of such
jurisdiction.
About Supernus Pharmaceuticals, Inc.
Supernus Pharmaceuticals, Inc. is a specialty
pharmaceutical company focused on developing and commercializing
products for the treatment of central nervous system diseases. The
Company currently markets Trokendi XR® (extended-release
topiramate) for the prophylaxis of migraine and the treatment of
epilepsy, and Oxtellar XR® (extended-release oxcarbazepine) for the
treatment of epilepsy. The Company is also developing several
product candidates to address large market opportunities in
psychiatry, including SPN-810 for the treatment of Impulsive
Aggression in ADHD patients and SPN-812 for the treatment of
ADHD.
Forward Looking Statements: This press release
includes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements include those relating to whether the proposed offering
of Notes will be completed. These statements do not convey
historical information, but relate to predicted or potential future
events that are based upon management’s current expectations. These
statements are subject to risks and uncertainties that could cause
actual results to differ materially from those expressed or implied
by such statements. In addition to the factors mentioned in this
press release, such risks and uncertainties include, but are not
limited to, the Company’s ability to sustain and increase its
profitability; the Company’s ability to raise sufficient capital to
fully implement its corporate strategy; the implementation of the
Company’s corporate strategy; the Company’s future financial
performance and projected expenditures; the Company’s ability to
increase the number of prescriptions written for each of its
products; the Company’s ability to increase its net revenue; the
Company’s ability to enter into future collaborations with
pharmaceutical companies and academic institutions or to obtain
funding from government agencies; the Company’s product research
and development activities, including the timing and progress of
the Company’s clinical trials, and projected expenditures; the
Company’s ability to receive, and the timing of any receipt of,
regulatory approvals to develop and commercialize the Company’s
product candidates; the Company’s ability to protect its
intellectual property and operate its business without infringing
upon the intellectual property rights of others; the Company’s
expectations regarding federal, state and foreign regulatory
requirements; the therapeutic benefits, effectiveness and safety of
the Company’s product candidates; the accuracy of the Company’s
estimates of the size and characteristics of the markets that may
be addressed by its product candidates; the Company’s ability to
increase its manufacturing capabilities for its products and
product candidates; the Company’s projected markets and growth in
markets; the Company’s product formulations and patient needs and
potential funding sources; the Company’s staffing needs; and other
risk factors set forth from time to time in the Company’s SEC
filings made pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended. The Company undertakes
no obligation to update the information in this press release to
reflect events or circumstances after the date hereof or to reflect
the occurrence of anticipated or unanticipated events, except as
required by law.
CONTACT:
Jack A. Khattar, President and CEOGregory S. Patrick, Vice
President and CFOSupernus Pharmaceuticals, Inc.Tel: (301)
838-2591
Or
Investor Contact:Peter VozzoWestwicke PartnersOffice: (443)
213-0505Mobile: (443) 377-4767Email: peter.vozzo@westwicke.com
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