Radius to price $300 million seven-year convertible notes at 2.75%-3.25% yield, up 32.5%-37.5%

By Stephanie N. Rotondo

Seattle, Aug. 7 – Radius Health Inc. is planning a $300 million sale of convertible senior notes due Sept. 1, 2024, the company said in a regulatory filing on Monday.

Price talk is for a yield of 2.75% to 3.25% and an initial conversion premium of 32.5% to 37.5%, a market source reported.

J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are the joint bookrunners.

There is a $45 million over-allotment option.

Conversions will be settled in common stock, cash or a combination of both, at the company’s option.

Holders can convert the bonds at any time after Dec. 31, 2017, but only in certain circumstances. That includes if the stock hits a 130% price hurdle or upon a change of control.

The convertibles become redeemable on or after Sept. 1, 2021 if the stock hits a 130% price hurdle.

Holders can put the notes upon a fundamental change.

Proceeds will be used to support the U.S. commercial launch of TYMLOS (abaloparatide) injection and the development of life cycle management activities, such as the investigational abaloparatide transdermal patch, and to advance the development of pipeline product candidates, including a phase 2 clinical trial of elacestrant (RAD1901) in breast cancer and a phase 1 study of RAD140 in breast cancer, and for general corporate purposes.

Radius is a Waltham, Mass.-based biopharmaceutical company.

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