Orexigen Prices Offering Of $100 Mln Of Convertible Senior Notes Due 2020

(RTTNews) - Orexigen Therapeutics Inc. (OREX), a biopharmaceutical company focused on the treatment of obesity, announced Tuesday that it priced its offering of $100 million aggregate principal amount of convertible senior notes due 2020.

The company has granted the initial purchasers a 13-day option to purchase up to an additional $15 million aggregate principal amount of such Notes.

Upon conversion, the Notes will be settled in shares of the Company's common stock. However, if the Company receives stockholder approval in accordance with the Nasdaq Listing Standards, the Company noted that it will settle conversions of the Notes through payment or delivery, as the case may be, of cash, shares of Company's common stock or a combination thereof, at the Company's election.

According to the company, the Notes will pay interest semi-annually at a rate of 2.75% per year. The Notes will mature on December 1, 2020, unless earlier repurchased or converted in accordance with their terms prior to such date. Prior to September 1, 2020, the Notes will be convertible at the option of holders only upon satisfaction of certain conditions and during certain periods, and thereafter, at any time until the close of business on the business day immediately preceding the maturity date. Holders of the Notes will have the right to require the Company to repurchase all or some of their Notes at 100% of their principal amount, plus any accrued and unpaid interest, upon the occurrence of certain events.

The conversion rate for the Notes will initially be 122.1225 shares per $1,000 principal amount, which is equivalent to an initial conversion price of approximately $8.19 per share of common stock, and is subject to adjustment under the terms of the Notes. The initial conversion price of the Notes represents a premium of approximately 32.5% to the $6.18 per share closing price of the Company's common stock on December 2, 2013. The sale of the Notes is expected to close on December 6, 2013, subject to customary closing conditions.

The company estimates that the net proceeds from the offering will be approximately $96.1 million after deducting the initial purchasers' discounts and commissions and the estimated offering expenses payable by it.

The company said it plans to use the net proceeds from the offering of the Notes for working capital and other general corporate purposes. It may also use a portion of the net proceeds to in-license or acquire new businesses or products; however, it has no current commitments or obligations to do so.