Leiden, the Netherlands – 14 January 2020
Pharming Group N.V. (“Pharming” or the “Company”) (Euronext Amsterdam: PHARM) announces today the launch of an offering (the “Offering”) of approximately €125 million of senior unsecured convertible bonds due 2025 (the “Bonds”). The net proceeds of the issue of the Bonds will be used to redeem the approximately US$ 56 million loan with Orbimed Advisors in full, thereby reducing the Company’s financing costs and extending its debt maturity through the period to approval of most of the Company’s existing pipeline. The balance of the net proceeds will be used to support capital expenditure in relation to the expansion of the commercialisation and manufacturing infrastructure of the Company, and serve as funding for the launch of Pharming’s recently acquired Leniolisib product and for additional acquisitions/inlicensing opportunities.
Further Details on the Offering
The Bonds will have a principal amount of €100,000 each. The Bonds will be issued at par and are expected to carry a coupon of between 2.25% and 3.00% per annum payable semi-annually in arrear in equal instalments. Unless previously converted, redeemed or purchased and cancelled, the Bonds will be redeemed at par on the stated maturity date, which is expected to be on 21 January 2025.
The Bonds will be convertible into ordinary shares of the Company (the “Shares”) with the initial conversion price expected to be set at a premium of between 35% and 40% above the volume weighted average price (VWAP) of a Share on Euronext Amsterdam between opening of trading on the launch date and the pricing of the Offering. The initial conversion price of the Bonds will be subject to customary adjustment provisions as will be set out in the terms and conditions of the Bonds.
The number of Shares initially underlying the Bonds is expected to be a maximum of 62,433,000, representing approximately 9.9% of the Company’s current issued share capital. Any adjustment to the conversion price resulting in an increase in the number of conversion shares may require the Company to obtain further authorisation from its shareholders to issue Shares, grant rights to subscribe for Shares and exclude pre-emptive rights.
The Issuer will have the option to redeem all, but not some only, of the outstanding Bonds in cash at par plus accrued interest at any time, a) if, on or after 13 February 2023, the parity value on each of at least 20 dealing days in a period of 30 consecutive dealing days shall have exceeded 130% of the principal amount or b) if, at any time, 85% or more of the aggregate principal amount of the Bonds originally issued shall have been previously converted and/or repurchased and cancelled.
The final terms of the Bonds are expected to be announced later today. Closing and settlement of the Offering are expected to take place on or around 21 January 2020 (the “Issue Date”).
Application will be made for the Bonds to be admitted to trading on the Open Market (Freiverkehr) of the Frankfurt Stock Exchange by no later than 30 days following the Issue Date.
In the context of the Offering, the Company and the Company’s subsidiaries will agree to a lock-up undertaking in respect of further issues of Shares and rights to acquire Shares for a period commencing on pricing and ending 90 calendar days following the Issue Date, subject to certain customary exceptions (including exceptions for existing approved employee share schemes) and waiver by the Sole Global Coordinator and Sole Bookrunner.
J.P. Morgan is acting as Sole Global Coordinator and Sole Bookrunner for the Offering.
The Bonds will be offered via an accelerated book building process through a private placement only to institutional investors outside the United States of America, Australia, South Africa and Japan.