By Stephanie N. Rotondo and Wendy Van Sickle
Seattle, April 26 – Flexion Therapeutics Inc. priced an upsized $175 million of seven-year convertible senior notes at par on Wednesday to yield 3.375% and an initial conversion premium of 30%, according to a press release.
The yield came in the middle of talk of 3.125% to 3.625%, and the conversion premium was on top of talk of 30%. The deal was upsized from an initially announced $125 million.
Wells Fargo Securities LLC, BMO Capital Markets and RBC Capital Markets are the bookrunners on the Rule 144A deal.
There is a $26.25 million over-allotment option, upsized from $18.75 million.
The issue is non-callable for three years and is provisionally callable after that, but only if the stock hits a 130% price hurdle.
The initial conversion rate will be 37.3413 shares of common stock per $1,000 principal amount of notes for an initial conversion price of about $26.78 per share of common stock.
Conversions will be settled in cash, stock, or a combination.
Proceeds will be used for the commercialization and manufacture of Zilretta – also known as FX006 – if approved, and product pipeline development, as well as working capital and general corporate purposes. Flexion may also use some of the funds to in-license, acquire or invest in complementary businesses, technologies, products or assets.
Flexion is a Burlington, Mass.-based specialty pharmaceutical company focused on the development and commercialization of novel, local therapies for the treatment of patients with musculoskeletal conditions, beginning with osteoarthritis.
| Issuer: | Flexion Therapeutics Inc.
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| Securities: | Convertible senior notes
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| Amount: | $175 million
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| Greenshoe: | $26.25 million
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| Maturity: | May 1, 2024
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| Bookrunners: | Barclays and Jefferies LLC
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| Coupon: | 3.375%
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| Conversion premium: | 30%
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| Conversion price: | $26.78
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| Conversion rate: | 37.3413 shares
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| Call options: | Provisionally callable after three years if stock hits a 130% price hurdle
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| Pricing date: | April 26
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| Settlement date: | May 2
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| Talk: | 3.125% to 3.625% yield and initial conversion premium of 30%
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| Stock symbol: | Nasdaq: FLXN
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| Stock price: | $20.60, closing price on Wednesday
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| Market capitalization: | $647.44 million
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