On February 25, 2025 BridgeBio Pharma, Inc. (Nasdaq: BBIO) (the "Company," "we" or "BridgeBio") reported the pricing of $500 million aggregate principal amount of 1.75% convertible senior notes due 2031 (the "notes") in a private offering (the "offering") to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") (Press release, BridgeBio, FEB 25, 2025, View Source [SID1234650624]). In connection with the offering, the Company granted the initial purchasers an option to purchase up to an additional $75 million aggregate principal amount of notes. The sale of the notes is expected to close on February 28, 2025, subject to customary closing conditions.
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
The Company estimates that the net proceeds from the sale of the notes will be approximately $489.5 million (or approximately $563.0 million if the initial purchasers exercise their option to purchase additional notes in full), after deducting the initial purchasers’ discounts and estimated offering expenses payable by the Company. The Company intends to use a portion of the net proceeds from the offering to repay all outstanding borrowings under and terminate its Financing Agreement, dated as of January 17, 2024, with the lenders party thereto and Blue Owl Corporation, as administrative agent, as amended (the "Financing Agreement"), and pay any fees related thereto. The termination of the Financing Agreement, which accounted for approximately $51.5 million of cash paid for interest in 2024 and contains various restrictive covenants, will provide the Company with reduced pro forma interest expense and greater operational flexibility.
The Company intends to use approximately $48.3 million of the remaining net proceeds from the offering to repurchase 1,405,411 shares of its common stock from certain purchasers of the notes in privately negotiated transactions effected through one of the initial purchasers or an affiliate thereof and entered into concurrently with the pricing of the notes (such transactions, the "share repurchases"). The agreed to purchase price per share of the Company’s common stock in the share repurchases is equal to the last reported sale price of the Company’s common stock of $34.35 per share on the Nasdaq Global Select Market on February 25, 2025. The share repurchases could increase (or reduce the size of any decrease in) the market price of the Company’s common stock, and could have resulted in a higher effective conversion price for the notes. The Company expects to use the remaining net proceeds from the offering for general corporate purposes.
The notes will bear interest at a rate of 1.75% per year, payable semi-annually in arrears on March 1 and September 1 of each year, beginning September 1, 2025. The notes will mature on March 1, 2031, unless earlier converted, redeemed or repurchased. Prior to December 2, 2030, the notes will be convertible only upon satisfaction of certain conditions and during certain periods. Thereafter, the notes will be convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The notes will be convertible at the option of the holders, subject to certain conditions and during certain periods, into cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, with the form of consideration determined at the Company’s election.
The conversion rate will initially be 20.0773 shares of the Company’s common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $49.81 per share of the Company’s common stock). The initial conversion price of the notes represents a premium of approximately 45.0% over the last reported sale price of the Company’s common stock of $34.35 per share on February 25, 2025.
The Company may not redeem the notes prior to March 6, 2028. On or after March 6, 2028 and on or before the 41st scheduled trading day immediately before the maturity date of the notes, the Company may redeem for cash all or any portion of the notes, at its option at any time, and from time to time, if (i) the last reported sale price per share of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption and (ii) certain other conditions are satisfied. The redemption price will be equal to 100% of the principal amount of the notes being redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
Holders of the notes will have the right to require the Company to repurchase all or a portion of their notes at 100% of their principal amount, plus any accrued and unpaid interest, upon the occurrence of certain events.
When issued, the notes will be the Company’s senior unsecured obligations and will rank senior in right of payment to any of the Company’s unsecured indebtedness that is expressly subordinated in right of payment to the notes; equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness and obligations to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries.
The notes and the shares of common stock issuable upon conversion of the notes, if any, are not being registered under the Securities Act, or the securities laws of any other jurisdiction. The notes and the shares of common stock issuable upon conversion of the notes, if any, may not be offered or sold in the United States except in transactions exempt from, or not subject to, the registration requirements of the Securities Act and any applicable state securities laws.
This press 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 securities laws of such jurisdiction.