On September 22, 2026, Halozyme Therapeutics, Inc. (the "Company," "we," "us" or "our") completed its previously announced sale of $1,500.0 million aggregate principal amount of 1.50% Convertible Senior Notes due 2033 (the "Convertible Notes"), including $200.0 million in aggregate principal amount of its Convertible Notes purchased pursuant to the exercise by the initial purchasers (the "Initial Purchasers") of the Convertible Notes of the option (the "Convertible Notes Option") to purchase additional Convertible Notes. The Convertible Notes were issued pursuant to an indenture, dated as of September 22, 2026, (the "Indenture") between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"). The Company offered and sold the Convertible Notes in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"). The Initial Purchasers offered and sold the Convertible Notes to "qualified institutional buyers" pursuant to the exemption from registration provided by Rule 144A under the Securities Act. The offer and sale of the Convertible Notes and the shares of common stock issuable upon conversion of the Convertible Notes have not been registered under the Securities Act, or the securities laws of any other jurisdiction, and the Convertible Notes and such shares may not be offered or sold absent registration or an applicable exemption from registration requirements, or in a transaction not subject to, such registration requirements.
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The Company received net proceeds from the offering of approximately $1,471.1 million after deducting the Initial Purchasers’ discounts and commissions and the Company’s estimated offering expenses. The Company used approximately $187.5 million of the net proceeds of the offering to fund the cost of entering into the Capped Call Transactions (as defined herein). In addition, the Company expects to use a portion of the net proceeds of the offering to repurchase for cash approximately $151.7 million aggregate principal amount of its outstanding 0.25% convertible senior notes due 2027 (the "2027 Notes") and $220.0 million aggregate principal amount of its outstanding 1.00% convertible senior notes due 2028 (the "2028 Notes" and, together with the 2027 Notes, the "Existing Convertible Notes") for a total repurchase cost (including accrued and unpaid interest) of approximately $217.0 million of the 2027 Notes and a total repurchase cost (including accrued and unpaid interest) of approximately $435.5 million of the 2028 Notes in privately negotiated transactions effected through one of the initial purchasers of the Convertible Notes or its affiliate, as the Company’s agent (the "Note Repurchases").
The Company intends to use the remainder of the net proceeds from the offering for general corporate purposes, including working capital, capital expenditures, potential acquisitions and strategic transactions, and, potentially, future note repurchases including repurchases of the Existing Convertible Notes from time to time or for the repayment of the Convertible Notes at maturity or upon early optional redemption at the Company’s discretion.
The Convertible Notes will pay interest semi-annually in arrears on April 1st and October 1st of each year, beginning on April 1, 2027, at an annual rate of 1.50%. The Convertible Notes will be convertible into cash, and, if applicable, shares of the Company’s common stock, at the Company’s election, based on the applicable conversion rate at such time. The Convertible Notes are unsecured obligations of the Company and will rank senior in right of payment to all of the Company’s indebtedness that is expressly subordinated in right of payment to the Convertible Notes, will rank equally in right of payment with all of the Company’s existing and future liabilities that are not so subordinated, will be effectively junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness and will be structurally subordinated to all indebtedness and other liabilities (including trade payables) of the Company’s current or future subsidiaries.
Holders may convert their Convertible Notes at their option only in the following circumstances: (1) during the 30 consecutive trading days immediately after the period consisting of the first 20 trading days of any calendar quarter commencing after the calendar quarter ending on December 31, 2026, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least five trading days during such 20-day trading period; (2) during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the "measurement period") in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of Company’s common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the Company’s common stock, as described in the Indenture; (4) if the Company calls such notes for redemption; and (5) at any time from, and including April 1, 2033, until the close of business on the second scheduled trading day immediately before the maturity date.
The initial conversion rate for the Convertible Notes will be 7.1509 shares of common stock per $1,000 in principal amount of Convertible Notes, equivalent to a conversion price of approximately $139.84 per share of common stock. The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued or unpaid interest.
(Filing, Halozyme, SEP 22, 2026, View Source [SID1234671025])