Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP) Files An 8-K Entry into a Material Definitive Agreement

Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP) Files An 8-K Entry into a Material Definitive Agreement

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Item1.01

Entry into a Material Definitive Agreement.

On December27, 2016, Sucampo Pharmaceuticals, Inc. (the
Company) issued $300.0million aggregate
principal amount of its 3.25% Convertible Senior Notes due 2021
(the Notes) to Leerink Partners LLC
(the Initial Purchaser), who
subsequently resold the Notes to qualified institutional buyers
(the Note Offering) in reliance on the
exemption from registration provided by Rule 144A under the
Securities Act of 1933, as amended (the Securities
Act
). The Notes sold in the Note Offering include
$40.0million aggregate principal amount of Notes sold to the
Initial Purchaser to its option to purchase additional Notes,
solely to cover over-allotments, which was exercised in full on
December21, 2016.

The Company estimates that the net proceeds from the Note
Offering will be $290.4million, after deducting the Initial
Purchasers discount and estimated offering expenses. Concurrently
with the closing of the Note Offering, the Company intends to use
the net proceeds from the Note Offering to repay in full
approximately $238.4million due under the Companys senior secured
credit facility, including all accrued but unpaid interest and a
prepayment premium. The Company intends to use the remaining net
proceeds for general corporate purposes.

The Notes were issued to an Indenture, dated as of December27,
2016 (the Indenture), between the
Company and U.S. Bank National Association, as trustee. Interest
on the Notes will be payable semi-annually in cash in arrears on
June15 and December15 of each year, beginning on June15, 2017, at
a rate of 3.25% per year. The Notes mature on December15, 2021
unless earlier converted or repurchased. The Notes are not
redeemable prior to the maturity date, and no sinking fund is
provided for the Notes.

The Notes are convertible at an initial conversion rate of
60.2637 shares of the Companys ClassA common stock (the
Common Stock) per $1,000 principal
amount of the Notes, subject to adjustment under the Indenture,
which is equal to an initial conversion price of approximately
$16.59 per share of Common Stock. Upon conversion, the Notes will
be settled in shares of the Companys Common Stock, together with
a cash payment in lieu of delivering any fractional share. The
conversion rate will be subject to adjustment in some events but
will not be adjusted for any accrued and unpaid interest. In
addition, following certain corporate events that occur prior to
the maturity date, the Company will increase the conversion rate
for a holder who elects to convert its Notes in connection with
such a corporate event in certain circumstances.

If the Company undergoes a fundamental change (as defined in the
Indenture), holders may require the Company to repurchase for
cash all or any portion of their Notes at a fundamental change
repurchase price equal to 50% of the principal amount of the
Notes to be repurchased, plus accrued and unpaid interest to, but
excluding, the fundamental change repurchase date.

The Indenture includes customary terms and covenants, including
certain events of default after which the Notes may be due and
payable immediately. The following events are considered events
of default, which may result in acceleration of the maturity of
the Notes:

(1) default in any payment of interest on any Note when due and
payable and the default continues for a period of 30 days;
(2) default in the payment of principal of any Note when due and
payable at its stated maturity, upon any required repurchase,
upon declaration of acceleration or otherwise;
(3) the Companys failure to comply with its obligation to convert
the Notes in accordance with the Indenture upon exercise of a
holders conversion right and such failure continues for a
period of five business days;
(4) the Companys failure to give a fundamental change notice when
due;
(5) the Companys failure to comply with its obligations under the
Indenture in connection with a consolidation, merger or sale
of assets;
(6) the Companys failure for 60 days after written notice from
the trustee or the holders of at least 25% in principal
amount of the Notes then outstanding has been received to
comply with any of the Companys other agreements contained in
the Notes or the Indenture;
(7) default by the Company or any of its significant subsidiaries
(as defined in the Indenture) with respect to any mortgage,
agreement or other instrument under which there may be
outstanding, or by which there may be secured or evidenced,
any indebtedness for money borrowed in excess of $10.0million
(or its foreign currency equivalent) in the aggregate of the
Company and/or any such subsidiary, whether such indebtedness
now exists or shall hereafter be created (i)resulting in such
indebtedness becoming or being declared due and payable prior
to its maturity date, or (ii)constituting a failure to pay
the principal or interest of any such debt when due and
payable at its stated maturity, upon required repurchase,
upon declaration of acceleration or otherwise, and, in the
cases of clauses (i)and (ii), such acceleration shall not
have been rescinded or annulled or such failure to pay or
default shall not have been cured or waived, or such
indebtedness is not paid or discharged, as the case may be,
within 30 days after written notice to us by the trustee or
to us and the trustee by holders of at least 25% in aggregate
principal amount of Notes then outstanding in accordance with
the Indenture;
(8) certain events of bankruptcy, insolvency, or reorganization
of the Company or any of the Companys significant
subsidiaries; or
(9) a final judgment or judgments for the payment of $10.0million
(or its foreign currency equivalent) or more (excluding any
amounts covered by insurance) in the aggregate rendered
against the Company or any of its subsidiaries, which
judgment is not discharged, bonded, paid, waived or stayed
within 60 days after (i)the date on which the right to appeal
thereof has expired if no such appeal has commenced, or
(ii)the date on which all rights to appeal have been
extinguished.

Subject to certain exceptions, the Company has agreed not to sell
or transfer any Common Stock of the Company for 60 days without
first obtaining the written consent of the Initial Purchaser. The
Companys directors and executive officers and certain
stockholders have also agreed not to sell or transfer any Common
Stock of the Company for 60 days, subject to certain exceptions,
without first obtaining the written consent of the Initial
Purchaser.

The Indenture and form of Note are filed herewith as Exhibit 4.1
and Exhibit 4.2, respectively, and are incorporated by reference
herein. The foregoing description of the terms of the Notes and
the Indenture does not purport to be complete and is qualified in
its entirety by reference to such exhibits.

Item2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement
of a Registrant.

See Item 1.01
above, which is incorporated by reference herein.

Item3.02 Unregistered Sales of Equity Securities.

See Item 1.01
above, which is incorporated by reference herein.

Item8.01 Other Events.

On December20,
2016, the Company entered into a Purchase Agreement (the
Purchase Agreement) with the Initial
Purchaser relating to the Note Offering. The Company and the
Initial Purchaser relied on exemptions from registration based in
part on representations made by the Company and the Initial
Purchaser, respectively. The Purchase Agreement includes
customary representations, warranties and covenants by the
Company and the Initial Purchaser. Under the terms of the
Purchase Agreement, the Company has agreed to indemnify the
Initial Purchaser against certain liabilities under the
Securities Act.

On December21,
2016, the Company issued a press release announcing the pricing
of the Note Offering. A copy of the press release is filed
herewith as Exhibit 99.1 and incorporated by reference
herein.

None of the Notes
or the Common Stock issuable upon conversion of the Notes has
been registered under the Securities Act or the securities laws
of any other jurisdiction, and such securities may not be offered
or sold in the United States absent registration or an applicable
exemption from registration requirements. This Current Report on
Form 8-K does not constitute an offer to sell, or a solicitation
of an offer to buy, any security and shall not constitute an
offer, solicitation or sale in any jurisdiction in which such
offering would be unlawful.

This Current
Report on Form 8-K includes forward-looking statements regarding
future events. All statements other than statements of historical
fact are statements that could be deemed forward-looking
statements, including statements regarding the anticipated uses
of the proceeds from the Note Offering, any statements of
expectation or belief, and any statements of assumptions
underlying any of the foregoing. These statements are based on
current expectations on the date of this report and involve a
number of significant risks and uncertainties that may cause
actual results to differ significantly from such estimates. The
risks include the satisfaction of the closing conditions of the
Note Offering. The Companys filings with the Securities and
Exchange Commission identify many other risks and uncertainties.
Any forward-looking statements that the Company makes in this
report speak only as of the date of such statement, and the
Company undertakes no obligation to update such
statements.

Item9.01. Financial Statements and Exhibits.

(d)Exhibits

Exhibit Number ExhibitDescription
4.1 Indenture, dated as of December27, 2016, by and between the
Company and U.S. Bank National Association, as Trustee.
4.2 Form of Note representing the Companys 3.25% Convertible
Senior Notes due 2021 (included as Exhibit A to the Indenture
filed herewith as Exhibit 4.1)
99.1 Press Release, dated December20, 2016, titled Sucampo
Announces Pricing of $260.0 Million 3.25% Convertible Senior
Note Offering.


About Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP)

Sucampo Pharmaceuticals, Inc. is a biopharmaceutical company. The Company focuses on research and development of drugs to treat gastrointestinal, ophthalmic and oncology-based inflammatory disorders. It operates through development and commercialization of pharmaceutical products segment. Its operations are conducted through Sucampo AG, based in Zug, Switzerland, through which the Company conducts certain worldwide and European operations; Sucampo Pharma, LLC, based in Tokyo and Osaka, Japan and R-Tech Ueno, Ltd., based in Kobe, Japan, through which the Company conducts its Asian operations; Sucampo Pharma Americas LLC, based in Rockville, Maryland, through which the Company conducts operations in North and South America, and Sucampo Pharma Europe, Ltd., based in Oxford, the United Kingdom. It offers AMITIZA for the treatment of constipation and RESCULA for the lowering of intraocular pressure (IOP). Its products under development include cobiprostone, RTU-1096 and RTU-009.

Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP) Recent Trading Information

Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP) closed its last trading session up +0.03 at 13.98 with 1,884,437 shares trading hands.

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