NEUROCRINE BIOSCIENCES, INC. (NASDAQ:NBIX) Files An 8-K Entry into a Material Definitive Agreement
Item1.01 Entry into a Material Definitive Agreement.
Purchase Agreement
On April26, 2017, Neurocrine Biosciences, Inc. (the
Company) entered into a purchase
agreement (the Purchase
Agreement) with Jefferies LLC and
Barclays Capital Inc., as representatives of the several initial
purchasers (the Initial
Purchasers), relating to the sale by
the Company of $517.5million aggregate principal amount of the
Companys 2.25% Convertible Senior Notes due 2024 (the
Notes), including $67.5million
aggregate principal amount of Notes issued to the exercise in
full by the Initial Purchasers over-allotment option to purchase
additional Notes, in a private offering (the
Note
Offering) to qualified institutional
buyers to Rule 144A under the Securities Act of 1933, as amended
(the Securities
Act). to the terms of the Purchase
Agreement, the parties have agreed to indemnify each other
against certain liabilities, including certain liabilities under
the Securities Act. A copy of the Purchase Agreement is filed
herewith as Exhibit 99.1 and is incorporated by reference herein
and the description of the terms of the Purchase Agreement in
this Current Report on Form 8-K does not purport to be complete
and is qualified in its entirety by reference to such exhibit.
The Company estimates that the net proceeds from the Note
Offering will be approximately $502.2million after deducting the
Initial Purchasers discounts and commissions and estimated
offering expenses payable by the Company. The Company intends to
use the net proceeds from the Note Offering for general corporate
purposes, which may include commercialization expenses, clinical
trial and other research and development expenses, capital
expenditures, working capital and general and administrative
expenses, and potential acquisitions of or investments in
businesses, products and technologies that complement the
Companys business, although the Company has no present
commitments or agreements to make any such acquisitions or
investments.
Indenture
The Notes were issued to an Indenture, dated as of May2, 2017
(the Indenture), between the Company
and U.S. Bank National Association, as trustee. The Notes will
mature on May15, 2024, unless earlier repurchased, redeemed or
converted. The Company will pay interest on the Notes at an
annual rate of 2.25%, payable semi-annually in arrears on May15
and November15 of each year, beginning on November15, 2017.
Noteholders may convert their Notes at their option only in the
following circumstances: (i)during any calendar quarter
commencing after the calendar quarter ending on September30, 2017
(and only during such calendar quarter), if the last reported
sale price per share of the Companys common stock for each of at
least 20 trading days, whether or not consecutive, during the
period of 30 consecutive trading days ending on, and including,
the last trading day of the immediately preceding calendar
quarter exceeds 130% of the conversion price on the applicable
trading day; (ii)during the five consecutive business days
immediately after any 10 consecutive trading day period (such 10
consecutive trading day period, the measurement period) if the
trading price per $1,000 principal amount of Notes for each
trading day of the measurement period was less than 98% of the
product of the last reported sale price per share of the Companys
common stock on such trading day and the conversion rate on such
trading day; (iii)upon the occurrence of certain corporate events
or distributions on the Companys common stock; (iv)if the Company
calls the Notes for redemption; and (v)at any time from, and
including, January15, 2024 until the close of business on the
scheduled trading day immediately before the maturity date of the
Notes. The Company will settle conversions by paying or
delivering, as applicable, cash, shares of the Companys common
stock or a combination of cash and shares of common stock, at its
election, based on the applicable conversion rate.
The Notes are convertible at an initial conversion rate of
13.1711 shares of common stock per $1,000 principal amount of
Notes, subject to adjustment under the Indenture, which is equal
to an initial conversion price of approximately $75.92 per share
of common stock. If a make-whole fundamental change (as defined
in the Indenture) occurs, then the Company will in certain
circumstances increase the conversion rate for a specified period
of time.
The Notes will be redeemable, in whole or in part, at the
Companys option at any time, and from time to time, on or after
May15, 2021, at a cash redemption price equal to the principal
amount of the Notes to be redeemed, plus accrued and unpaid, if
any, to, but excluding, the redemption date but only if the last
reported sale price per share of the Companys common stock
exceeds 130% of the conversion price on each of at least 20
trading days during the 30 consecutive trading days ending on,
and including, the trading day immediately before the date the
Company sends the related redemption notice. If the Company
undergoes a fundamental change (as defined in the Indenture),
noteholders may require the Company to repurchase their Notes at
a cash repurchase price equal to the principal amount of the
Notes to be repurchased, plus accrued and unpaid interest, if
any, 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) |
a default in the payment when due (whether at maturity, upon redemption, repurchase upon fundamental change or otherwise) of the principal of, or the redemption price or fundamental change repurchase price for, any Note; |
| (2) |
a default for 30 days in the payment when due of interest on any Note; |
| (3) |
the Companys failure to deliver, when required by the Indenture, a fundamental change notice or a notice required in connection with certain corporate events; |
| (4) |
a default in the Companys obligation to convert a note in accordance with the Indenture upon the exercise of the conversion right with respect thereto and such failure continues for five business days; |
| (5) |
a default in the Companys obligations in connection with a consolidation, merger or sale of assets: |
| (6) |
a default in any of the Companys obligations or agreements under the Indenture or the Notes (other than a default set forth in paragraphs (1), (2), (3), (4) or (5)above) where such default is not cured or waived within 60 days after notice to the Company by the trustee, or to the Company and the trustee by holders of at least 25% of the aggregate principal amount of Notes then outstanding; |
| (7) |
a default by the Company or any of its subsidiaries with respect to any one or more mortgages, agreements or other instruments under which there is outstanding, or by which there is secured or evidenced, any indebtedness for money borrowed of at least $50,000,000 (or its foreign currency equivalent) in the aggregate, where such default: |
| (i) |
constitutes a failure to pay the principal of any of such indebtedness when due and payable (after the expiration of all applicable grace periods) at its stated maturity, upon required repurchase, upon declaration of acceleration or otherwise; or |
| (ii) |
results in such indebtedness becoming or being declared due and payable before its stated maturity (an acceleration), |
and, in either case, such acceleration has not been rescinded or
annulled or such failure to pay or default is not cured or
waived, or such indebtedness is not paid or discharged in full,
within 60 days after written notice to the Company by the trustee
or to the Company and the trustee by holders of at least 25% of
the aggregate principal amount of Notes then outstanding; and
| (8) |
certain events of bankruptcy, insolvency and reorganization with respect to the Company or any of its significant subsidiaries (as defined in the Indenture). |
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.
On April25, 2017, the Company issued a press release announcing
the proposed Note Offering. A copy of the press releaseis filed
herewith as Exhibit99.2.
On April26, 2017, the Company issued a press release announcing
the pricing of the Note Offering. A copy of the press releaseis
filed herewith as Exhibit99.3.
The Notes were sold to qualified institutional buyers to Rule
144A under the Securities Act. The offer and sale of the Notes
and the common stock issuable upon conversion of the Notes have
not been and will not be 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.
Item2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
See Item1.01 above, which is incorporated by reference herein.
Upon conversion of the Notes, up to a maximum of 9,712,802 shares
of the Companys common stock may be issued.
Item3.02 Unregistered Sales of Equity
Securities.
See Item1.01 above, which is incorporated by reference herein.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking
statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. These statements relate to
future events and involve known and unknown risks, uncertainties
and other factors which may cause the Companys actual results,
performance or achievements to be materially different from any
future results, performances or achievements expressed or implied
by the forward-looking statements. In some cases, you can
identify forward-looking statements by terms such as may, will,
should, could, would, expects, plans, anticipates, believes,
estimates, projects, predicts, potential and similar expressions
intended to identify forward-looking statements. These statements
reflect the Companys current views with respect to future events
and are based on assumptions and subject to risks and
uncertainties. Given these uncertainties, you should not place
undue reliance on these forward-looking statements. Also, these
forward-looking statements represent the Companys estimates and
assumptions only as of the date of this Current Report on Form
8-K.
Item9.01. Financial Statements and Exhibits.
(d) Exhibits.
|
Exhibit Number |
Description |
|
| 4.1 |
Indenture, dated as of May2, 2017, by and between the Company and U.S. Bank National Association, as Trustee. |
|
| 4.2 |
Form of Note representing the Companys 2.25% Convertible Senior Notes due 2024 (included as Exhibit A to the Indenture filed as Exhibit 4.1). |
|
| 99.1 |
Purchase Agreement, dated April26, 2017, by and among the Company, Jefferies LLC and Barclays Capital Inc. |
|
| 99.2 | Press release, dated April25, 2017. | |
| 99.3 | Press release, dated April26, 2017. |
About NEUROCRINE BIOSCIENCES, INC. (NASDAQ:NBIX)
Neurocrine Biosciences, Inc. is engaged in the development of pharmaceutical products focused on neurological and endocrine-based diseases and disorders. The Company’s two lead late-stage clinical programs are Elagolix, a gonadotropin-releasing hormone (GnRH) antagonist for women’s health that is partnered with AbbVie Inc. (AbbVie), and NBI-98854 (valbenazine), a vesicular monoamine transporter 2 (VMAT2) inhibitor for the treatment of movement disorders. The Company focuses on developing NBI-640756 against Essential tremor. Its research and development focuses on addressing diseases and disorders of the central nervous and endocrine systems, which include therapeutic categories ranging from hypothalamic-pituitary-adrenal (HPA) disorders to stress-related disorders and neurological/neuropsychiatric diseases. Its Corticotropin-Releasing Factor (CRF) is a hypothalamic hormone released directly into the hypophyseal portal vasculature. NEUROCRINE BIOSCIENCES, INC. (NASDAQ:NBIX) Recent Trading Information
NEUROCRINE BIOSCIENCES, INC. (NASDAQ:NBIX) closed its last trading session down -0.82 at 53.83 with 1,338,594 shares trading hands.
