OSI Pharmaceuticals underwriter exercises greenshoe, raising convertibles to $115 million

By Angela McDaniels

Seattle, Dec. 28 - OSI Pharmaceuticals' underwriter of its offering of 20-year convertible senior subordinated notes exercised the $15 million over-allotment option in full, according to an 8-K report filed with the Securities and Exchange Commission on Dec. 21. The size of the deal is now $115 million. The company originally priced $100 million of the notes on Dec. 15 at par to yield 2% with an initial conversion premium of 25%.

UBS Investment Bank was bookrunner for the Rule 144A deal.

The notes are non-callable for five years and have a put in years five, 10 and 15.

OSI has used a part of the proceeds to buy 500,00 shares of its common stock concurrently with the offering and to enter into call spread transactions to reduce dilution from conversion of the notes.

Remaining proceeds will used for ongoing development and commercialization of Tarceva and Macugen and for general corporate purposes.

In connection with the call spread transactions, UBS has it will buy shares of OSI's common stock in secondary market transactions and enter into various derivative transactions.

OSI Pharmaceuticals is biotechnology company based in Melville, N.Y., with a focus on oncology.

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