Medarex Inc. is aiming to pay down old debt through new notes financed at a more favorable rate.
The Princeton, N.J.-based company agreed to privately place $150 million worth of 2.25 percent convertible senior notes due 2011 to qualified institutional buyers. The debt sale marks the second such placement for the antibody development firm in less than a year. Last summer, Medarex sold $100 million of 4.25 percent convertible senior notes due 2010. (See BioWorld Today, July 21, 2003.)
The company said it would use the latest proceeds to purchase or redeem all or a portion of its outstanding 4.5 percent convertible subordinated notes due 2006 and any excess for general corporate purposes.
The 2.25 percent notes initially will be convertible at the holder's option into common shares at a rate of about 72.9 shares per $1,000 worth of notes, which is equivalent to an initial conversion price of about $13.72 per share. The initial conversion price represents a 30 percent premium over the April 27 closing bid of $10.55 per share. On Wednesday, the stock (NASDAQ:MEDX) fell 55 cents to close at $10.
Medarex, which granted the initial buyers an option to purchase up to an additional $50 million of notes, expects the placement to close May 3.
Its lead product is MDX-010, a fully human antibody in Phase II studies for melanoma and prostate cancer. Other products include MDX-010 in Phase I for HIV, MDX-060 in Phase I for CD30+ lymphomas, as well as earlier-stage programs for prostate cancer and autoimmune disease. The company also has numerous products in development through collaborative partnerships.
TKT Lays Out Plans For $80M Of Notes
Transkaryotic Therapies Inc. said it plans to publicly offer $80 million of senior convertible notes due 2011.
The Cambridge, Mass.-based company also said it would grant the underwriters an overallotment option to purchase an additional $12 million of notes within 30 days after the offering. JP Morgan Securities Inc., of New York, would be the offering's sole book-running manager, along with joint lead manager SG Cowen & Co. LLC, also of New York. Co-managers would be Pacific Growth Equities LLC, of San Francisco, and RBC Capital Markets Corp., of New York.
TKT develops treatments for diseases caused by protein deficiencies. In Europe and elsewhere outside the U.S., it markets Replagal, an enzyme replacement therapy for Fabry's disease, and is developing treatments for Hunter syndrome and Gaucher's disease. The company also plans to commercialize Dynepo (epoetin delta), its gene-activated erythropoietin product for anemia related to kidney disease, in the European Union. Earlier this month, TKT gained all rights associated with Dynepo in Europe and all other territories outside the U.S. from Aventis SA, of Strasbourg, France. (See BioWorld Today, April 6, 2004.)
On Wednesday, its stock (NASDAQ:TKTX) dropped $1.23 to close at $15.09.
Exchange Offer Under Way For ViroPharma
ViroPharma Inc. began an offer to exchange up to about $99.1 million of its new 6 percent convertible senior plus cash notes due 2009 for up to all of the $127.9 million of its currently outstanding 6 percent convertible subordinated notes.
The Exton, Pa.-based company, which is developing products for diseases such as cytomegalovirus and hepatitis C, is offering to the public an additional $25 million of the new notes for cash. The exchange offer is scheduled to expire May 25, unless extended.
New York-based U.S. Bancorp Piper Jaffray Inc. is serving as the exchange offer's dealer manager and placement agent for the new-money offering. U.S. Bank National Association is serving as the exchange agent.
Earlier this year, ViroPharma cut 70 percent of its work force to restructure operations and leave the company with enough cash to sustain operations until at least the end of 2006. Its products in development include an intranasal formulation of pleconaril for the common cold, an antiviral called maribavir for cytomegalovirus and a hepatitis C virus program with Wyeth, of Madison, N.J. (See BioWorld Today, Jan. 21, 2004.)
On Wednesday, ViroPharma's stock (NASDAQ:VPHM) gained 4 cents to close at $2.32.