On May 25, 2021 Heron Therapeutics, Inc. (Nasdaq: HRTX) ("Heron") reported that it has sold $150 million of senior unsecured convertible promissory notes (the "Notes") in a private placement transaction (Press release, Heron Therapeutics, MAY 25, 2021, View Source [SID1234580541]). The Notes are convertible into shares of Heron common stock at a conversion price of $15.276 per share, which represents a 13% premium over the most recent closing price of Heron’s common stock. Proceeds from the sale of the Notes will be used for the commercial launch of ZYNRELEFTM (bupivacaine and meloxicam) extended-release solution, as well as for general working capital.
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The Notes will be senior, unsecured obligations of Heron and will accrue interest at a rate of 1.5% per annum, payable semi-annually in arrears. The Notes will mature on June 1, 2026, unless earlier redeemed, converted or repurchased. Holders will have the right to convert their Notes at any time. Heron will settle conversions solely in shares of its common stock, except for payments of cash in lieu of fractional shares.
"Based on sales projections for our three commercial products, these funds allow the company to not only fully implement its launch plans for ZYNRELEF, but should also be sufficient to reach profitability," said Barry Quart, Pharm.D., Chairman and Chief Executive Officer of Heron. "In the first 24 hours after announcing FDA approval, ZYNRELEF received its first formulary approval for unrestricted use. We are confident that this is the first of many formulary approvals."
The offer and sale of the Notes and any shares of common stock issuable upon conversion of the Notes have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any other securities laws, and the Notes and any such shares cannot be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the Notes or any shares of common stock issuable upon conversion of the Notes, nor will there be any sale of the Notes or any such shares, in any state or other jurisdiction in which such offer, sale or solicitation would be unlawful.
J. Wood Capital Advisors LLC acted as financial advisor and Gibson, Dunn & Crutcher LLP acted as legal advisor to Heron on the transaction.