CAMBRIDGE, Mass.--(BUSINESS WIRE)--
Ironwood
Pharmaceuticals, Inc. (NASDAQ: IRWD) today announced that it intends
to offer, subject to market and other conditions, $300 million aggregate
principal amount of convertible senior unsecured notes that will mature
on June 15, 2022 (the Notes). The Notes will be offered and sold to
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended. Ironwood also expects to grant the
initial purchasers of the Notes an option to purchase up to an
additional $45 million aggregate principal amount of the Notes solely to
cover over-allotments.
The Notes will bear cash interest, payable on June 15 and December 15 of
each year, beginning on December 15, 2015. The Notes will not be
redeemable prior to maturity. The Notes will be convertible, only during
certain periods and subject to certain circumstances, into cash, shares
of Ironwood Class A common stock, or a combination of cash and shares of
Ironwood's Class A common stock, at Ironwood's election. Final terms of
the Notes, including interest rate, conversion rate, conversion price,
and certain other terms of the offering, will be determined at the time
of pricing.
In connection with the pricing of the Notes, Ironwood also expects to
enter into one or more privately negotiated convertible note hedge
transactions and warrant transactions with certain financial
institutions (the option counterparties) in order to reduce the
potential dilution with respect to shares of Ironwood's Class A common
stock upon any conversion of the Notes and/or offset any cash payments
Ironwood is required to make in excess of the principal amount of
converted Notes, in each case, up to a threshold amount. The warrant
transactions could have a dilutive effect with respect to Ironwood's
Class A common stock to the extent that the market price per share of
Ironwood's Class A common stock, as measured under the terms of the
warrant transactions, exceeds the applicable strike price of the
warrants on any expiration date of the warrants, which is anticipated to
be significantly higher than the closing price of Ironwood's Class A
common stock on the date the warrants are issued. If the initial
purchasers exercise their option to purchase additional Notes, Ironwood
expects to enter into additional convertible note hedge and warrant
transactions.
Ironwood intends to use the net proceeds of the offering to strengthen
its balance sheet, improve its capital structure and to fund general
corporate purposes, which may include the repayment or redemption of all
or a portion of its outstanding indebtedness and the acquisition of, or
investment in, businesses or other strategic assets, and to pay the cost
of the convertible note hedge transactions (after such cost is partially
offset by proceeds from the warrant transactions).
Ironwood has been advised that, in connection with the convertible note
hedge and warrant transactions, the option counterparties or their
respective affiliates expect to enter into various hedging transactions,
including (without limitation) derivative transactions, with respect to
Ironwood's Class A common stock and/or to purchase Ironwood's Class A
common stock concurrently with or shortly after the pricing of the
Notes. This activity could increase (or reduce the size of any decrease
in) the market price of Ironwood's Class A common stock or the Notes at
that time. In addition, the option counterparties and/or their
respective affiliates may, from time to time, modify their hedge
positions by entering into or unwinding various hedging positions,
including (without limitation) derivative transactions, with respect to
Ironwood's Class A common stock and/or purchase or sell Ironwood's Class
A common stock or other securities of Ironwood in secondary market
transactions (and are likely to do so during any observation period
related to a conversion of the Notes). This activity could also cause a
decrease or offset or avoid an increase in the market price of
Ironwood's Class A common stock or the Notes.
The offer and sale of the Notes are not being registered under the
Securities Act, or any state securities laws. The Notes may not be
offered or sold in the United States except pursuant to an exemption
from the registration requirements of the Securities Act and any
applicable state securities laws.
This news release does not constitute an offer to sell or a solicitation
of an offer to buy the securities described herein, nor shall there be
any sale of these securities, in any state or jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the laws of such jurisdiction.
About Ironwood Pharmaceuticals
Ironwood Pharmaceuticals (NASDAQ: IRWD) is focused on creating medicines
that make a difference for patients, building value to earn the
continued support of our fellow shareholders, and empowering our team to
passionately pursue excellence. We discovered, developed and are
commercializing linaclotide, which is approved in the United States and
a number of other countries. Our pipeline priorities include exploring
further opportunities for linaclotide, as well as leveraging our
therapeutic expertise in gastrointestinal disorders and our
pharmacologic expertise in guanylate cyclases to address patient needs
across the upper and lower gastrointestinal tract. Ironwood was founded
in 1998 and is headquartered in Cambridge, Mass.
Any trademarks referred to in this press release are the property of
their respective owners. All rights reserved.
This press release contains forward-looking statements. Investors are
cautioned not to place undue reliance on these forward-looking
statements, including, but not limited to, statements about Ironwood's
intention to commence an offering of Notes and enter into convertible
note hedge transactions and warrant transactions, the expected terms of
the offering, the Notes and the hedge and warrant transactions and
Ironwood's anticipated use of proceeds. Each forward‐looking statement
is subject to risks and uncertainties that could cause actual results to
differ materially from those expressed or implied in such statement.
Applicable risks and uncertainties include, but are not limited to,
those related to whether or not Ironwood will be able to consummate the
offering and the hedge and warrant transactions on the timeline or with
the terms anticipated, if at all. In addition, Ironwood's management
retains broad discretion with respect to the allocation of the net
proceeds of this offering. Applicable risks also include those that are
listed under the heading "Risk Factors" and elsewhere in Ironwood's
Quarterly Report on Form 10-Q for the three months ended March 31, 2015,
in addition to the risk factors that are included from time to time in
Ironwood's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q,
and any subsequent SEC filings. Ironwood undertakes no obligation to
update these forward-looking statements to reflect events or
circumstances occurring after this press release. Except as otherwise
noted, these forward-looking statements speak only as of the date of
this press release. All forward‐looking statements are qualified in
their entirety by this cautionary statement.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150608006535/en/
Ironwood Pharmaceuticals, Inc.
Media Relations
Trista
Morrison, 617-374-5095
Director, Corporate Communications
tmorrison@ironwoodpharma.com
or
Investor
Relations
Meredith Kaya, 617-374-5082
Director, Investor
Relations
mkaya@ironwoodpharma.com
Source: Ironwood Pharmaceuticals, Inc.
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