On November 6, 2025 Halozyme Therapeutics, Inc. (NASDAQ: HALO) ("Halozyme" or the "Company"), reported the pricing of $650 million aggregate principal amount of 0% convertible senior notes due 2031 (the "2031 Notes") and $650 million aggregate principal amount of 0.875% convertible senior notes due 2032 (the "2032 Notes" and, together with the 2031 Notes, the "Convertible Notes"). The Company also granted a 13-day option to the initial purchasers to purchase up to an additional $100 million aggregate principal amount of the 2031 Notes and up to an additional $100 million aggregate principal amount of the 2032 Notes. The Convertible Notes are being offered and sold only to persons reasonably believed to be "qualified institutional buyers" pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act").
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The 2031 Notes will be senior, unsecured obligations of the Company. The 2031 Notes will not bear regular interest, and the principal amount of the 2031 Notes will not accrete. The 2032 Notes will be senior, unsecured obligations of the Company and will accrue interest payable semi-annually in arrears at an annual rate of 0.875%. The 2031 Notes have an initial conversion rate of 11.4683 shares of the Company’s common stock per $1,000 principal amount of 2031 Notes (which is equivalent to an initial conversion price of approximately $87.20 per share of the Company’s common stock, representing an initial conversion premium of approximately 27.5% above the closing price of $68.39 per share of the Company’s common stock on November 6, 2025). The 2032 Notes have an initial conversion rate of 11.4683 shares of the Company’s common stock per $1,000 principal amount of 2031 Notes (which is equivalent to an initial conversion price of approximately $87.20 per share of the Company’s common stock, representing an initial conversion premium of approximately 27.5% above the closing price of $68.39 per share of the Company’s common stock on November 6, 2025). Each conversion rate for the 2031 Notes and 2032 Notes, respectively, is subject to adjustment in some events but will not be adjusted for any accrued and unpaid special and additional interest with respect to the 2031 Notes and accrued and unpaid interest with respect to the 2032 Notes. Holders of the Convertible Notes will have the right to require the Company to repurchase all or a portion of their Convertible Notes upon the occurrence of a fundamental change (as defined in each indenture governing the Convertible Notes) at a cash repurchase price of 100% of their principal amount plus any accrued and unpaid special and additional interest with respect to the 2031 Notes and accrued and unpaid interest with respect to the 2032 Notes. The 2031 Notes will mature on February 15, 2031, and the 2032 Notes will mature on November 15, 2032, in each case, unless earlier redeemed, repurchased or converted in accordance with their respective terms prior to such dates. Prior to the close of business on the business day immediately preceding August 15, 2030, the 2031 Notes will be convertible only upon the satisfaction of certain conditions and during certain periods, and on and after August 15, 2030, at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date of the 2031 Notes, the 2031 Notes will be convertible regardless of these conditions. Prior to the close of business on the business day immediately preceding May 15, 2032, the 2032 Notes will be convertible only upon the satisfaction of certain conditions and during certain periods, and on and after May 15, 2032, at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date of the 2032 Notes, the 2032 Notes will be convertible regardless of these conditions. The Company will settle conversions in cash and, if applicable, shares of the Company’s common stock, at the Company’s election. The Company expects to close the offering on November 12, 2025, subject to the satisfaction of various customary closing conditions.
In connection with the pricing of the Convertible Notes, the Company entered into privately negotiated capped call transactions relating to each series of Convertible Notes with one or more financial institutions, which may include one or more of the initial purchasers of the Convertible Notes and/or their respective affiliates (collectively, the "Capped Call Counterparties"). The capped call transactions relating to the 2031 Notes initially cover, subject to customary adjustments, the number of shares of the Company’s common stock that will initially underlie the 2031 Notes, and the capped call transactions relating to the 2032 Notes initially cover, subject to customary adjustments, the number of shares of the Company’s common stock that will initially underlie the 2032 Notes. The cap price of the capped call transactions relating to the 2031 Notes is initially $136.78 per share of the Company’s common stock, representing a premium of 100% above the last reported sale price of $68.39 per share of the Company’s common stock on November 6, 2025, and is subject to certain adjustments under the terms of the capped call transactions. The cap price of the capped call transactions relating to the 2032 Notes is initially $136.78 per share of the Company’s common stock, representing a premium of 100% above the last reported sale price of $68.39 per share of the Company’s common stock on November 6, 2025, and is subject to certain adjustments under the terms of the capped call transactions.
The Company will receive net proceeds from the offering of approximately $1.274 billion (or approximately $1.47 billion if the initial purchasers exercise their option to purchase additional Convertible Notes in full), after deducting the initial purchasers’ discounts and commissions and the Company’s estimated offering expenses. The Company expects to use approximately $182.7 million of the net proceeds of the offering to fund the cost of entering into the capped call transactions. The Company also expects to use approximately $1.020 billion of the net proceeds of the offering to enter into privately negotiated agreements with certain holders of its outstanding 0.25% convertible senior notes due 2027 (the "2027 Notes") and 1.00% convertible senior notes due 2028 (the "2028 Notes" and, together with the 2027 Notes, the "Existing Convertible Notes") to repurchase their Existing Convertible Notes for cash through privately negotiated transactions entered into concurrently with or shortly after the offering (the "Note Repurchases"). In connection with the Note Repurchases, the Company expects to pay approximately $1.019 billion in cash, which includes accrued interest, to repurchase the Existing Convertible Notes.
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 following the offering or for the repayment of the Notes at maturity. If the initial purchasers exercise their option to purchase additional notes, the Company intends to use a portion of the net proceeds from the sale of additional notes to fund the cost of entering into additional capped call transactions.
The Note Repurchases could increase (or reduce the size of any decrease in) the market price of the Company’s common stock or the Convertible Notes. The Company also expects that some existing noteholders may purchase or sell shares of the Company’s common stock in the market to hedge their exposure in connection with these transactions. The Note Repurchases and any associated hedging by holders could have affected or affect the market price of the Company’s common stock prior to, concurrently with or shortly after the pricing of the Convertible Notes, and could have also resulted in a higher effective conversion price for the Convertible Notes.
The capped call transactions relating to each series of Convertible Notes are generally expected to reduce the potential dilution to the Company’s common stock upon conversion of the relevant series of Convertible Notes and/or offset the amount of any potential cash payments the Company may be required to make in excess of the principal amount of converted Convertible Notes of such series, as the case may be, in the event that the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, is greater than the strike price of the capped call transactions, which initially corresponds to the conversion price of the Convertible Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the Convertible Notes. If, however, the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, exceeds the cap price of the capped call transactions, there would nevertheless be dilution and/or there would not be an offset of such potential cash payments, in each case, to the extent that such market price exceeds the cap price of the capped call transactions.
The Company has been advised that, in connection with establishing their initial hedges of the capped call transactions, the option 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 concurrently with or shortly after the pricing of the Convertible Notes. This activity could increase (or reduce the size of any decrease in) the market price of the Company’s common stock or the Convertible Notes at that time.
In addition, the Company has been advised that the Capped Call Counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to the Company’s common stock and/or purchasing or selling the Company’s common stock or selling the Company’s common stock or other securities of the Company in secondary market transactions following the pricing of the Convertible Notes and from time to time prior to the maturity of the Convertible Notes (and (x) are likely to do so during any observation period related to a conversion of the Convertible Notes, following any redemption of the Convertible Notes by the Company, or following any repurchase of the Convertible Notes by the Company in connection with any fundamental change and (y) are likely to do so following any repurchase of Convertible Notes by the Company other than in connection with any such redemption or any fundamental change if the Company elects to unwind a corresponding portion of the capped call transactions in connection with such repurchase). This activity could also cause or avoid an increase or decrease in the market price of the Company’s common stock or the Convertible Notes, which could affect a holder’s ability to convert its Convertible Notes and, to the extent the activity occurs during any observation period related to a conversion of a series of Convertible Notes, it could affect the number of shares of the Company’s common stock and value of the consideration that a holder will receive upon conversion of its Convertible Notes.
This press release is neither an offer to sell nor a solicitation of an offer to buy the Convertible Notes or the shares of the Company’s common stock issuable upon conversion of the Convertible Notes, if any, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction. Any offer of these securities will be made only by means of a private offering memorandum.
The offer and sale of the Convertible Notes and the shares of the Company’s common stock issuable upon conversion of the Convertible Notes, if any, have not been registered under the Securities Act, or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
(Press release, Halozyme, NOV 6, 2025, View Source;Announces-Pricing-of-Private-Offering-of-650-Million-of-Convertible-Senior-Notes-due-2031-and-650-Million-of-Convertible-Senior-Notes-due-2032/default.aspx [SID1234659646])