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TESARO Announces Offering of $165 Million of Convertible Senior Notes Due 2021

WALTHAM, Mass., Sept. 22, 2014 (GLOBE NEWSWIRE) -- TESARO, Inc. (Nasdaq:TSRO) announced today that, subject to market and other conditions, it intends to offer $165 million aggregate principal amount of convertible senior notes due 2021 (the "notes") in an underwritten public offering. TESARO also expects to grant the underwriters a 30-day option to purchase up to $24.75 million aggregate principal amount of additional notes on the same terms and conditions to cover over-allotments. The offering is subject to market conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.

The notes are expected to pay interest semi-annually on April 1 and October 1, beginning from April 1, 2015 and will be convertible into cash, shares of TESARO's common stock or a combination of cash and shares of TESARO's common stock, at TESARO's election. The notes will mature on October 1, 2021, unless earlier converted or repurchased in accordance with their terms. Prior to the close of business on the business day immediately preceding April 1, 2021, the notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The interest rate, conversion rate and certain other terms will be determined at the time of the pricing of the offering. Citigroup and Deutsche Bank Securities are acting as joint book-running managers for the offering, with Leerink Partners, Baird and BMO Capital Markets acting as co-managers.

TESARO intends to use a portion of the net proceeds from the offering to fund the payment of the cost of capped call transactions (described below). TESARO expects to use the remaining net proceeds to fund commercialization activities for rolapitant (oral formulation), clinical trials for rolapitant (intravenous formulation), niraparib and TESARO's other product candidates, to carry out TESARO's immuno-oncology platform strategy, and for working capital and general corporate purposes. TESARO may also use a portion of the proceeds to in-license or acquire, as the case may be, product candidates, technologies, compounds, other assets or complementary businesses, though TESARO has no current understandings, agreements or commitments to do so.

In connection with the pricing of the notes, TESARO expects to enter into capped call transactions with one or more of the underwriters (or their affiliates) (the "option counterparties"). The capped call transactions are expected generally to reduce the potential dilution and/or offset the cash payments TESARO is required to make in excess of the principal amount upon conversion of the notes in the event that the market price of TESARO's common stock is greater than the floor price of the capped call transactions, which will initially correspond to the initial conversion price of the notes, with such reduction and/or offset being subject to a cap based on the cap price of the capped call transaction. If the underwriters exercise their option to purchase additional notes, TESARO expects to enter into additional capped call transactions with the option counterparties.

TESARO has been advised that in connection with establishing their initial hedges of the capped call transaction, the option counterparties or their respective affiliates expect to enter into various derivative transactions with respect to TESARO's common stock in privately negotiated transactions concurrently with the pricing of the notes and/or purchase shares of TESARO's common stock shortly after the pricing of the notes in open market transactions. This activity could increase (or reduce the size of any decrease in) the market price of the common stock or the notes at that time. In addition, TESARO has been advised that the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to the common stock and/or purchasing or selling shares of common stock or other securities of TESARO in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and is likely to do so during any conversion period related to a conversion of notes). This activity could also cause or avoid an increase or a decrease in the market price of the common stock or the notes, which could affect the ability of holders of the notes to convert the notes and, to the extent the activity occurs during any conversion period related to a conversion of notes, it could affect the amount and value of the consideration that holders of the notes will receive upon conversion of the notes.

The notes described above are being offered by TESARO pursuant to its automatic shelf registration statement on Form S-3 filed with the Securities and Exchange Commission (the "SEC") on July 1, 2013. A preliminary prospectus supplement and related prospectus related to the offering has been filed with the SEC and is available on the SEC's website located at http://www.sec.gov. Copies of the preliminary prospectus supplement and related prospectus relating to this offering may be obtained from Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, via telephone at (800) 831-9146 or email at prospectus@citi.com, or from Deutsche Bank Securities Inc., Attention: Prospectus Department, 60 Wall Street, New York, NY 10005-2836, via telephone at (800) 503-4611 or email at prospectus.cpdg@db.com.

This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, nor will there be any sale of, these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state or other jurisdiction.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve risks and uncertainties, including statements regarding the proposed public offering. More information about potential factors that could affect TESARO's business and financial results is contained in its annual report on Form 10-K, its quarterly reports on Form 10-Q and other filings with the SEC. TESARO does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.

About TESARO

TESARO is an oncology-focused biopharmaceutical company dedicated to improving the lives of cancer patients by acquiring, developing and commercializing safer and more effective therapeutics.

CONTACT: For further information, please contact: Jennifer Davis Sr. Director, Corporate Development & Investor Relations (339) 970-0900 ir@tesarobio.com

Source:TESARO, Inc.