On March 24, 2022 Ascendis Pharma A/S (Nasdaq: ASND), a biopharmaceutical company that utilizes its innovative TransCon technologies to create new product candidates that address unmet medical needs, reported the pricing of its offering of US$500,000,000 aggregate principal amount of 2.25% convertible senior notes due 2028 (the "notes") in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") (Press release, Ascendis Pharma, MAR 24, 2022, View Source [SID1234610956]). The issuance and sale of the notes are scheduled to settle on March 29, 2022, subject to the satisfaction of customary closing conditions. Ascendis Pharma also granted the initial purchasers of the notes an option to purchase, for settlement within a period of 13 days from, and including, the date the notes are first issued, up to an additional US$75,000,000 aggregate principal amount of notes.
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The notes will be senior, unsecured obligations of Ascendis Pharma and will accrue interest at a rate of 2.25% per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2022. The notes will mature on April 1, 2028, unless earlier redeemed or converted. At any time before the close of business on the second scheduled trading day immediately before the maturity date, noteholders may convert their notes at their option into Ascendis Pharma’s ordinary shares represented by American Depositary Shares (the "ADSs") (each representing one of Ascendis Pharma’s ordinary shares as of the date of this release), together, if applicable, with cash in lieu of any fractional ADS, at the then-applicable conversion rate. The initial conversion rate is 6.0118 ADSs per US$1,000 principal amount of notes, which represents an initial conversion price of approximately US$166.34 per ADS. The initial conversion price represents a premium of approximately 42.5% over the last reported sale price of US$116.73 per ADS on March 24, 2022. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events.
The notes will be optionally redeemable, in whole or in part (subject to certain limitations), for cash at Ascendis Pharma’s option at any time, on or after April 7, 2025, but only if the last reported sale price per ADS exceeds 130% of the conversion price for a specified period of time. In addition, the notes will be optionally redeemable, in whole and not in part, at Ascendis Pharma’s option at any time in connection with certain changes in tax law. The optional redemption price will be equal to the principal amount of the notes to be optionally redeemed, plus accrued and unpaid interest, if any, to, but excluding, the optional redemption date.
If a "fundamental change" (as defined in the indenture for the notes) occurs, then, subject to a limited exception, noteholders may require Ascendis Pharma to redeem their notes for cash. The fundamental change redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the applicable fundamental change redemption date.
Ascendis Pharma estimates that the net proceeds from the offering will be approximately US$485.0 million (or approximately US$557.9 million if the initial purchasers exercise their option to purchase additional notes in full), after deducting the initial purchasers’ discounts and commissions and estimated offering expenses. Ascendis Pharma intends to use approximately US$116.7 million of the net proceeds from the offering to repurchase 1,000,000 ADSs in privately negotiated transactions effected through one of the initial purchasers or its affiliate, as Ascendis Pharma’s agent. These repurchases, and any other repurchases of the ADSs or ordinary shares, may increase, or reduce the size of a decrease in, the trading price of the ADSs and ordinary shares, and repurchases executed concurrently with the pricing of the offering may have affected the initial terms of the notes, including the initial conversion price. Ascendis Pharma intends to use the remaining net proceeds to support the commercialization and further development of TransCon hGH, to fund pre-commercialization activities and clinical development of TransCon PTH, clinical development of its other endocrinology rare disease programs and its oncology programs, including TransCon PTH, TransCon CNP, TransCon TLR7/8 Agonist and TransCon IL-2 β/γ, to identify and progress development of new product candidates, and for working capital and other general corporate purposes.
The offer and sale of the notes, the ADSs issuable upon conversion of the notes and the ordinary shares represented by such ADSs have not been, and will not be, registered under the Securities Act or any other securities laws, and the notes, such ADSs and such shares cannot be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the notes, the ADSs issuable upon conversion of the notes or the ordinary shares represented by such ADSs, nor will there be any sale of the notes, such ADSs or such shares, in any state or other jurisdiction in which such offer, sale or solicitation would be unlawful.