Research & Development
Omeros Prices USD 210m Convertible Notes Offering
13 November 2018 - - US-based biopharmaceutical company Omeros Corp. (NASDAQ: OMER) has priced an offering of USD 210m aggregate principal amount of its 6.25% convertible senior notes due 2023 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, the company said.

Omeros has granted the initial purchasers of the notes an option to purchase up to an additional USD 40m aggregate principal amount of the notes on the same terms and conditions referenced above.

The notes will be senior unsecured obligations of Omeros and interest will be payable semi-annually in arrears at a rate of 6.25% per annum.

These notes will mature on November 15, 2023, unless converted, repurchased or redeemed in accordance with their terms prior to such date.

The notes will be convertible, upon the satisfaction of certain conditions or during specified periods, into cash, shares of Omeros' common stock or a combination thereof as Omeros elects at its sole discretion.

Omeros will have the right to redeem the notes on or after November 15, 2019, subject to certain conditions.

The initial conversion rate of the notes is 52.0183 shares of Omeros' common stock per USD 1,000 principal amount of the notes, which is equivalent to an initial conversion price of approximately USD 19.22 per share of Omeros' common stock, and is subject to adjustment in certain circumstances.

This initial conversion price represents a premium of approximately 20% over the last reported sale price on November 8, 2018 of Omeros' common stock of USD 16.02 per share.

Omeros has entered into the capped call transaction described below in order to avoid dilution to Omeros' shareholders from conversions of the notes if Omeros' common stock price does not exceed USD 28.8360, which represents a premium of 80% over the last reported sale price of Omeros' common stock.

The aggregate gross proceeds to Omeros from the offering of the notes will be USD 210m, exclusive of any proceeds attributable to the initial purchasers' possible exercise of their option to purchase additional Notes.

Omeros intends to use a portion of the net proceeds of the offering to repay in full the amounts outstanding under Omeros' secured term loan agreement with CRG Servicing LLC, which has an annual interest rate of 12.25% and matures on September 30, 2022.

Amounts repaid will include all accrued but unpaid interest and prepayment fees under the term loan agreement.

Cantor Fitzgerald and Co. and UBS Investment Bank are acting as joint bookrunners for the offering. Cantor Fitzgerald and Co. is also acting as the sole structuring advisor for the offering.

In connection with the pricing of the notes, Omeros entered into a capped call transaction with Royal Bank of Canada, or RBC.

The capped call transaction is intended to minimize the potential dilution of Omeros' common stock and/or offset potential cash payments in excess of the principal amount of the converted notes upon conversion of the notes.

The offering is expected to close on November 15, 2018, subject to customary closing conditions.

Omeros is a commercial-stage biopharmaceutical company committed to discovering, developing and commercialising small-molecule and protein therapeutics for large-market as well as orphan indications targeting inflammation, complement-mediated diseases and disorders of the central nervous system.

The company's drug product OMIDRIA (phenylephrine and ketorolac intraocular solution) 1% / 0.3% is marketed for use during cataract surgery or intraocular lens replacement to maintain pupil size by preventing intraoperative miosis (pupil constriction) and to reduce postoperative ocular pain.

In the European Union, the European Commission has approved OMIDRIA for use in cataract surgery and other IOL replacement procedures to maintain mydriasis (pupil dilation), prevent miosis (pupil constriction), and to reduce postoperative eye pain.

Omeros has multiple Phase 3 and Phase 2 clinical-stage development programs focused on: complement-associated thrombotic microangiopathies; complement-mediated glomerulonephropathies; cognitive impairment; and addictive and compulsive disorders.

In addition, Omeros has a diverse group of preclinical programs and a proprietary G protein-coupled receptor platform through which it controls 54 new GPCR drug targets and corresponding compounds, a number of which are in preclinical development.

The company also exclusively possesses a novel antibody-generating platform..


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