OPKO Health, Inc. (NASDAQ: OPK) (the “Company”)
today announced that it is commencing a private offering of $200.0
million aggregate principal amount of its Convertible Senior Notes
due 2029 (the “Notes”). The Company also expects to grant the
initial purchaser in the offering 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 $30.0 million aggregate
principal amount of the Notes.
The Notes will be senior unsecured obligations
of the Company, are expected to pay interest semiannually and will
mature on January 15, 2029, unless earlier purchased or converted
in accordance with their terms. Holders of the Notes will have the
right to convert their Notes in certain circumstances and during
specified periods. Conversions of the Notes will be settled in
cash, shares of the Company’s common stock (“common stock”) or a
combination of thereof, at the Company’s election. However, before
the Company has available and has reserved the maximum number of
shares of the common stock issuable under the Notes, the Company
will be required to elect to deliver solely cash or, subject to
certain limitations, a combination of cash and shares of the common
stock upon conversion. The interest rate, initial conversion rate
and other terms of the Notes will be determined at the pricing of
the Notes.
Certain entities affiliated with Phillip Frost,
M.D., the Company’s Chairman and Chief Executive Officer, and Jane
H. Hsiao, Ph.D., MBA, the Company’s Vice-Chairman and Chief
Technical Officer, as well as additional existing holders, have
indicated an interest in acquiring, in a concurrent private
placement, approximately $70.0 million aggregate principal amount
of the Company’s Convertible Senior Notes due 2029 (the “Affiliate
Notes”) in exchange for approximately $70.0 million aggregate
principal amount of the Company’s existing 5% convertible
promissory notes, inclusive of approximately $5.0 million of
accrued but unpaid interest thereon, held by such persons. The
Company expects the Affiliate Notes to constitute part of the same
series as the Notes. However, if issued, the Affiliate Notes will
not initially be fungible with the Notes and will be subject to
different transfer restrictions than the Notes. The offering of the
Notes is not conditioned upon the closing of the concurrent private
placement of Affiliate Notes, but such private placement is
conditioned upon the closing of the offering of the Notes. The
foregoing persons’ indication of interest is not a binding
agreement or commitment to acquire the Affiliate Notes or any other
securities.
The Company expects to use up to $50.0 million
of the net proceeds from the offering of the Notes, and, if needed,
cash on hand, to repurchase shares of the common stock from
purchasers of Notes in privately negotiated transactions effected
with or through the initial purchaser or its affiliate. These
repurchases could increase, or prevent a decrease in, the market
price of the common stock or the Notes concurrently with the
pricing of the Notes, and could result in a higher effective
conversion price for the Notes.
Also, contemporaneously with the pricing of the
Notes, the Company expects to enter into separate, privately
negotiated transactions with one or more holders of the Company’s
outstanding 4.50% Convertible Senior Notes due 2025 (the “2025
Convertible Senior Notes”) to repurchase a portion of such notes.
The Company expects to use a portion of the net proceeds from the
offering of the Notes, and, if needed, cash on hand, to consummate
such repurchases. In addition, the Company may, from time to time,
repurchase, redeem or otherwise retire additional 2025 Convertible
Senior Notes. The terms of the foregoing note repurchases are
anticipated to be individually negotiated with one or more holders
of the 2025 Convertible Senior Notes and will depend on several
factors, including the market price of the common stock and the
trading price of the 2025 Convertible Senior Notes at the time of
each such repurchase. Such repurchases are not conditioned upon the
completion of the offering of the Notes, nor is the completion of
the offering of the Notes conditioned upon such repurchases. No
assurance can be given as to how much, if any, of the 2025
Convertible Senior Notes will be repurchased or the terms on which
they will be repurchased.
The Company intends to use any net proceeds from
the offering of the Notes that remain following the foregoing
common stock and note repurchases for general corporate
purposes.
Any repurchase of the 2025 Convertible Senior
Notes, and the potential related market activities by holders of
the 2025 Convertible Senior Notes participating in the foregoing
note repurchases or as a result of the unwind of their derivative
transactions with respect to the common stock, could increase (or
reduce the size of any decrease in) the market price of the common
stock, which may affect the trading price of the Notes at that time
and may result in a higher effective conversion price of the Notes.
The Company cannot predict the magnitude of such market activity or
the overall effect it will have on the price of the Notes or the
common stock.
The Notes and any shares of the common stock
issuable upon conversion of the Notes have not been, and will not
be, registered under the Securities Act of 1933, as amended (the
“Securities Act”), or any other securities laws, and the Notes and
any common stock issuable upon conversion of the Notes may not be
offered or sold in the United States absent registration under the
Securities Act or an applicable exemption from the registration
requirements of the Securities Act and other applicable securities
laws. The Notes are being offered only to persons reasonably
believed to be qualified institutional buyers in accordance with
Rule 144A under the Securities Act.
This press release does not constitute an offer
to sell, or the solicitation of an offer to buy, any securities and
shall not constitute an offer, solicitation, or sale in any
jurisdiction in which such offer, solicitation or sale would be
unlawful. This press release does not constitute an offer to
purchase, or notice of redemption, with respect to the 2025
Convertible Senior Notes, and the Company reserves the right to
elect not to proceed with the note repurchases described above.
This press release does not constitute an offer to repurchase
shares of common stock, and the Company reserves the right to elect
not to proceed with the common stock repurchases described
above.
About OPKO Health
OPKO Health is a multinational biopharmaceutical
and diagnostics company that seeks to establish industry-leading
positions in large, rapidly growing markets by leveraging its
discovery, development and commercialization expertise, and its
novel and proprietary technologies. For more information,
visit www.opko.com.
Cautionary Statement Regarding Forward
Looking Statements
This press release contains “forward-looking
statements,” as that term is defined under the Private Securities
Litigation Reform Act of 1995 (“PSLRA”), including, among other
things, statements related to the offering, the expected proceeds
from such offering and the expected use of proceeds from such
offering. These forward-looking statements may be identified by
words such as “expects,” “plans,” “projects,” “will,” “may,”
“anticipates,” “believes,” “should,” “intends,” “estimates,” and
other words of similar meaning. These statements are based on
management’s current expectations and are subject to uncertainty
and changes in circumstances. Many factors could cause the
Company’s actual activities or results to differ materially from
the activities and results anticipated in forward-looking
statements. These factors include those described in the Company’s
Annual Reports on Form 10-K filed and to be filed with the
Securities and Exchange Commission and under the heading “Risk
Factors” in the Company’s other filings with the Securities and
Exchange Commission, as well as the continuation and success of the
Company’s relationship with the Company’s commercial partners,
liquidity issues and the risks inherent in funding, developing and
obtaining regulatory approvals of new, commercially-viable and
competitive products and treatments. In addition, forward-looking
statements may also be adversely affected by general market
factors, competitive product development, product availability,
federal and state regulations and legislation, the regulatory
process for new products and indications, manufacturing issues that
may arise, patent positions and litigation, among other factors.
The forward-looking statements contained in this press release
speak only as of the date the statements were made, and the Company
does not undertake any obligation to update forward-looking
statements. The Company intends that all forward-looking statements
be subject to the safe-harbor provisions of the PSLRA.
Contacts:LHA Investor
RelationsYvonne Briggs, 310-691-7100ybriggs@lhai.com
orBruce Voss, 310-691-7100 bvoss@lhai.com
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