Ciphergen to exchange some 4.5% convertibles for new 7% convertibles, $11 million of cash

By Angela McDaniels

Seattle, Nov. 3 - Ciphergen Biosystems, Inc. said it entered into privately negotiated agreements with certain holders of its 4.5% convertible senior notes due 2008 under which the holders will exchange $27.5 million of the notes for $16.5 million of a new series of 7% convertible senior notes and $11.0 million in cash.

The new convertibles will mature on Sept. 1, 2011 and are convertible into the company's common stock at an initial conversion price of $2.00 per share. The company's stock (Nasdaq: CIPH) closed at $1.10 on Friday.

The 7% coupon may be reduced to 4% per year if the company receives approval or clearance from the Food and Drug Administration for the commercial sale of any of its ovarian cancer tests, according to a company news release.

The exchange is expected to close on Nov. 8 and is contingent on the completion of the sale of the company's life science research business to Bio-Rad Laboratories, Inc.

Ciphergen Biosystems is based in Fremont, Calif., where it researches protein biomarkers and develops them into systems and services for clinical, research and process proteomics applications.

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