By Wendy Van Sickle
Columbus, Ohio, Oct. 11 – Verastem, Inc. priced $150 million of 30-year 5% convertible notes in a registered direct offering on Thursday, with an initial conversion premium of 15%, according to a press release.
Lazard Frères & Co. LLC acted as placement agent.
The notes may be converted into shares of Verastem common stock at an initial conversion rate of 139.5771 shares per $1,000 principal amount. If the company has insufficient authorized but unissued shares, the deficiency will be settled in cash.
The company may force conversion of all the notes subject to a 130% price hurdle.
The convertibles are non-callable for four years, then become callable at par plus accrued interest.
Holders will have a put option at par plus accrued interest every five years on Nov. 1 of each year.
Proceeds will be used for the continued clinical development of the Copiktra drug and for working capital, capital expenses and general corporate purposes.
Based in Boston, Verastem discovers and develops drugs to treat cancer.
| Issuer: | Verastem, Inc.
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| Issue: | Convertible notes
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| Amount: | $150 million
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| Placement agent: | Lazard Frères & Co. LLC
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| Coupon: | 5%
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| Maturity: | Nov. 1, 2048
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| Conversion premium: | 15%
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| Conversion price: | $7.16
|
| Conversion ratio: | 139.5771
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| Call option: | After four years at par plus accrued interest
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| Put option: | At par plus accrued interest every five years, beginning Nov. 1, 2023
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| Pricing date: | Oct. 11
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| Settlement date: | Oct. 17
|
| Stock symbol: | Nasdaq: VSTM
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| Stock price: | $6.23 at close Oct. 11
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| Market capitalization: | $458.48 million
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