Home Commercial trading Cytokinetics Announces Pricing for $450 Million Convertible

Cytokinetics Announces Pricing for $450 Million Convertible


SOUTH SAN FRANCISCO, Calif., July 01 10, 2022 (GLOBE NEWSWIRE) — Cytokinetics, Incorporated (“Cytokinetics”) (Nasdaq: CYTK) today announced the pricing of its offering of $450.0 million aggregate principal amount of convertible senior notes to 3.50% Due 2027 (the “Notes”) pursuant to a private offer to qualified institutional purchasers pursuant to Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”).

Key elements of the transaction include:

  • $450.0 million 3.50% senior convertible bond issue (up 30.0% from conversion premium)
  • Redemption of approximately $116.9 million aggregate principal amount of 4.00% Convertible Senior Notes due 2026 (the “2026 Notes”)

The issue and sale of the Notes are expected to be settled on July 6, 2022, subject to customary closing conditions. Cytokinetics has also granted initial purchasers of the tickets an option to purchase, for settlement within 13 days of the original ticket issue date, up to an additional aggregate principal amount of 90, 0 million dollars.

The Notes will be senior unsecured obligations of Cytokinetics. The Notes will bear interest at the annual rate of 3.50%, payable semi-annually in arrears on January 1 and July 1 of each year, commencing on January 1, 2023. The Notes will mature on July 1, 2027, unless earlier converted, redeemed or acquired by Cytokinetics. Prior to March 1, 2027, Noteholders will only have the right to convert their Notes in certain circumstances. Beginning March 1, 2027, Noteholders may convert their Notes at any time, at their option, until the close of business on the scheduled Trading Day immediately prior to the Maturity Date. Cytokinetics will settle conversions by paying or delivering, as applicable, cash, common stock, or a combination of cash and common stock, at Cytokinetics’ option. The initial conversion rate is 19.5783 common shares per $1,000 principal amount of Notes, representing an initial conversion price of approximately $51.08 per common share. The initial conversion price represents a 30.0% premium to the last published sale price of $39.29 per Cytokinetics common share on June 30, 2022. The conversion rate and conversion price will be subject to adjustment as upon the occurrence of certain events.

The Notes will be non-refundable at Cytokinetics’ option prior to July 7, 2025. The Notes will be redeemable, in whole or in part (subject to certain limitations), at Cytokinetics’ option at any time, and from time to time, on or after July 7, 2025 and, in the case of a partial redemption, no later than the 60th scheduled trading day immediately prior to the maturity date, at a cash redemption price equal to the principal amount of the notes to be redeemed, plus accrued and unpaid charges interest, if any, up to but excluding the date of redemption, but only if the last reported sale price per share of Cytokinetics common stock exceeds 130% of the price of conversion for a specified period of time.

If a “Fundamental Change” (as defined in the Note Indenture) occurs, then, subject to a limited exception, Noteholders may require Cytokinetics to redeem their Notes at a cash redemption price equal the principal amount of the tickets to be redeemed. , plus accrued and unpaid interest, if any, up to, but excluding, the fundamental change redemption date.

Use of profits: Cytokinetics estimates that net proceeds from the offering will be approximately $436.0 million (or approximately $523.3 million if the initial purchasers fully exercise their option to purchase additional notes), after deducting discounts and initial purchaser commissions and estimated Cytokinetics offering fees. Cytokinetics intends to use:

  • Approximately $140.3 million of the net proceeds of the offering and issue 8,071,342 common shares to repurchase approximately $116.9 million in aggregate principal amount of its outstanding 2026 Notes through transactions negotiated in private concluded at the same time as the offer price; and
  • The remainder of the net proceeds of this offering to (a) expand and support its clinical development program for to affirm in patients with hypertrophic cardiomyopathy (“HCM”), including expenses associated with the potential conduct of a second Phase 3 clinical trial in patients with obstructive HCM and a first Phase 3 clinical trial in patients with non-obstructive HCM; (b) develop commercial capabilities and conduct readiness activities in the United States, Canada and Europe to support the potential launch of omecamtiv mecarbil and to affirm in these geographical areas; (c) advancing its early-stage clinical development pipeline, including the progression of CK-136 into proof-of-concept studies and the potential development of additional cardiac myosin inhibitors for the potential treatment of heart failure cardiac with preserved ejection fraction (“HFpEF”); (d) expand its research activities focused on muscle biology into muscle energy, growth and metabolism, and (e) for general corporate purposes, including working capital.

In connection with any redemption of the 2026 Notes, Cytokinetics expects that holders of the outstanding 2026 Notes who have hedged their equity price risk to the 2026 Notes (the “Hedged Holders”) may have, along with the pricing of the Notes, closed out their hedge positions by purchasing shares of Cytokinetics common stock and/or entering into or unwinding various derivative transactions relating to its common stock. The amount of Common Stock purchased by Covered Holders may have been substantial relative to the historical average daily trading volume of Cytokinetics Common Stock. This activity by Covered Holders may have increased the effective conversion price of the Notes.

As part of the offering, Cytokinetics has agreed with Royalty Pharma Development Funding, LLC to increase the size of the required draw down of the Tranche 4 or Tranche 5 term loans under the Funding Loan Agreement development of Cytokinetics with Royalty Pharma and other parties to $25 million. to $50 million, if the conditions of these loans are met.

The offer and sale of the Notes and any common shares issuable upon conversion of the Notes have not been and will not be registered under the securities law or any other securities law , and the Notes and such Shares may not be offered or sold except pursuant to an exemption or in a transaction not subject to the registration requirements of the Securities Act and any other securities law applicable securities.

This press release does not constitute an offer to sell or the solicitation of an offer to buy the Notes or the common shares issuable upon conversion of the Notes, nor will there be any sale of the Notes. or such actions, in any state or other jurisdiction in which such offer, sale or solicitation would be unlawful.

About Cytokinetics

Cytokinetics is a late-stage biopharmaceutical company focused on the discovery, development and commercialization of first-in-class muscle activators and cutting-edge muscle inhibitors as potential treatments for debilitating diseases in which muscle performance is compromised.

Forward-looking statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the completion of the offering, the expected amount and the anticipated use of net the proceeds and timing or amount of any redemption of the 2026 Notes by Cytokinetics and the potential impact of any preceding or related transactions on the market price of Cytokinetics’ common stock or the price of the Notes. Forward-looking statements represent Cytokinetics’ current expectations regarding future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those implied by the forward-looking statements. Among these risks and uncertainties are market conditions, the satisfaction of closing conditions relating to the offering and risks relating to the business of Cytokinetics, including those described under “Risk Factors” and elsewhere in the documents filed by Cytokinetics with the Securities and Exchange Commission (the “SEC”), including in its Quarterly Report on Form 10-Q for the period ended March 31, 2022, filed with the SEC on May 6, 2022, and future quarterly reports and current Cytokinetics filings with the SEC. Cytokinetics may not complete the offer described in this press release and, if the offer is completed, cannot provide any assurance as to its ability to effectively apply the net proceeds as described above. The forward-looking statements included in this press release speak only as of the date of this press release, and Cytokinetics does not undertake to update the statements included in this press release for subsequent developments, unless the law requires it.

Diane Weiser
Senior Vice President, Corporate Communications, Investor Relations
(415) 290-7757