RARE Daily

Sarepta Prices $1 Billion Convertible Note Offering on Heels of FDA Lifting Hold on DMD Trial

September 15, 2022

Sarepta Therapeutics priced $980.0 million aggregate principal amount of convertible senior unsecured notes in an offering that it says, with current cash and projected revenue, is expected to fund operations to profitability.

The offering comes one week after the U.S. Food and Drug Administration removed the clinical hold on SRP-5051 (vesleteplirsen), the company’s investigational, next-generation peptide-conjugated phosphorodiamidate morpholino oligomer (PPMO) to treat patients with Duchenne muscular dystrophy who are amenable to exon 51 skipping. After discussions with FDA and as part of the lift, Sarepta will adjust the global trial protocol to include expanded monitoring of urine biomarkers. ​The hold in Part B of Study 5051-201, also known as MOMENTUM, followed a serious adverse event of hypomagnesemia.

The convertible senior notes, which will mature on September 15, 2027, unless earlier redeemed, repurchased or converted, are being offered and sold only to persons reasonably believed to be qualified institutional buyers. Sarepta has also granted the initial purchasers of the notes an option to purchase up to an additional $150 million of notes. The sale of the notes to the initial purchasers is expected to settle on September 16, 2022, subject to customary closing conditions. An entity affiliated with a member of Sarepta’s Board of Directors has agreed to purchase $20 million aggregate principal amount of the notes in a separate concurrent private placement.

Sarepta estimates that the net proceeds of the offerings will be approximately $979.4 million (or approximately $1.1 billion if the initial purchasers’ option to purchase additional shares is exercised in full), after deducting the initial purchasers’ discounts and commissions and estimated offering expenses payable by Sarepta.

The company intends to use $110.7 million of the net proceeds from the offerings to pay the cost of capped call transactions, and approximately $248.3 million to repurchase approximately $150.6 million in aggregate principal amount of its convertible senior notes due 2024. In addition, Sarepta intends to use approximately $585.5 million of the net proceeds from the offerings to repay borrowings, to pay accrued and unpaid interest and prepayment fees, and terminate its credit agreement, and the remaining net proceeds to fund general corporate purposes. Sarepta anticipates that, along with current cash and projected revenue, this offering is sufficient to fund operations to profitability.

Author: Rare Daily Staff

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