On September 24, 2020 Eagle Pharmaceuticals, Inc. (Nasdaq: EGRX) ("Eagle" or the "Company") reported that its Board of Directors has approved a $25 million accelerated share repurchase ("ASR") transaction with JPMorgan Chase Bank, National Association ("JP Morgan") as part of the Company’s existing $160 million share repurchase program (Press release, Eagle Pharmaceuticals, SEP 24, 2020, View Source [SID1234565582]).
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The specific number of shares to be repurchased pursuant to the ASR is based on the average of the daily volume weighted average share prices of the Company’s common stock, less a discount, during the term of the ASR program. Based on yesterday’s closing price, the $25 million ASR would represent approximately 5% of the Company’s basic outstanding shares. Upon completion of the ASR, Eagle will have bought back a total of approximately $205 million of its stock since its IPO in 2014.
"The $25 million ASR reflects our ongoing confidence in our pipeline and continued earnings potential. With multiple opportunities to expand our RYANODEX franchise, the anticipated near-term launch of vasopressin, and three potential oncology launches in 2022 including PEMFEXY, fulvestrant and SM-88, along with the recent approval received by our Japanese marketing partner, SymBio, for its ready-to-dilute TREAKISYM product, we remain committed to building shareholder value," stated Scott Tarriff, Chief Executive Officer of Eagle Pharmaceuticals.
Under the terms of the agreement, Eagle will pay $25 million to JP Morgan on September 24, 2020, and receive 505,817 shares, representing approximately 80% of the notional amount of the ASR, based on the closing price of $39.54 on September 23, 2020. Upon settlement of the ASR, the final number of shares repurchased will be trued up based on the average of the daily volume weighted average share prices of the Company’s common stock, less a discount, during the term of the accelerated share repurchase program. Eagle expects the ASR to be completed in the fourth quarter of 2020. As of September 23, 2020, the Company had 13.5 million common shares outstanding.
The Company intends to use cash on hand to fund the ASR program. As of June 30, 2020, cash and cash equivalents were $108.2 million, net accounts receivable was approximately $46.8 million, and debt was $37 million.