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Intercept Pharmaceuticals Announces Public Offering of Convertible Senior Notes

NEW YORK, June 29, 2016 (GLOBE NEWSWIRE) -- Intercept Pharmaceuticals, Inc. (Nasdaq:ICPT) announced today that it has commenced an underwritten public offering of $400 million aggregate principal amount of convertible senior notes due 2023 (the notes). RBC Capital Markets, UBS Investment Bank, BofA Merrill Lynch, Citigroup and Credit Suisse are acting as joint book-running managers for the offering. Intercept intends to grant the underwriters an option, exercisable for 30 days, to purchase up to an additional $60 million aggregate principal amount of notes on the same terms and conditions, solely to cover over-allotments. The offering is subject to market and other conditions, and there can be no assurance as to whether the offering may be completed, or as to the actual size or terms of the offering.

The notes will be senior unsecured obligations of Intercept with interest payable semi-annually. The notes may be converted at the option of holders, under certain circumstances and during certain periods, into cash, shares of Intercept’s common stock or a combination of cash and shares of Intercept’s common stock, at Intercept’s election. The interest rate, conversion rate and certain other terms will be determined at the time of the pricing of the offering by Intercept and the underwriters.

In connection with the pricing of the notes, Intercept expects to enter into privately negotiated capped call transactions with one or more option counterparties, which may include the underwriters or their affiliates. The capped call transactions are expected generally to reduce the potential dilution to existing stockholders and/or offset the potential cash payments Intercept would be required to make in excess of the principal amount of the notes upon their conversion. In connection with establishing their initial hedges of the capped call transactions, the option counterparties and/or their respective affiliates expect to enter into various derivative transactions with respect to Intercept's common stock and/or purchase shares of Intercept's common stock concurrently with or shortly after the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of Intercept’s common stock or the notes at that time.

Intercept intends to use a portion of the net proceeds from the offering to fund the payment of the cost of the capped call transactions. Intercept expects to use the remaining net proceeds from the offering, together with its existing cash, cash equivalents and short-term investments, to fund the ongoing commercialization of Ocaliva™ (obeticholic acid, or OCA) in primary biliary cholangitis (PBC) in the United States; its preparation for and, subject to receipt of marketing approval, potential initiation of the commercial launch of Ocaliva in PBC in certain European countries as well as other target markets across the world such as Canada and Australia; the continued clinical development of OCA in PBC, nonalcoholic steatohepatitis (NASH) and primary sclerosing cholangitis (PSC); the advancement of its clinical program for INT-767; and continued advancement of other preclinical pipeline and research and development programs. Intercept intends to use the balance of the net proceeds from the offering, if any, for general corporate purposes, including general and administrative expenses, capital expenditures, working capital and prosecution and maintenance of its intellectual property. If the underwriters exercise their over-allotment option, Intercept may enter into additional capped call transactions.

Intercept has filed an automatic shelf registration statement on Form S-3 (including a prospectus dated April 1, 2014 and a preliminary prospectus supplement dated June 29, 2016) with the Securities and Exchange Commission, or the SEC, pursuant to which the notes are being offered. Before you invest, you should read the preliminary prospectus supplement, the accompanying prospectus and the other documents Intercept has filed with the SEC for more complete information about Intercept and the offering. You may get these documents for free by visiting EDGAR on the SEC web site at www.sec.gov. Alternatively, Intercept, any underwriter or any dealer participating in the offering will arrange to send you the prospectus and the preliminary prospectus supplement upon request to RBC Capital Markets, LLC, 200 Vesey Street, 8th Floor, New York, NY 10281-8098; Attention: Equity Syndicate; Tel: (877) 822-4089; email: equityprospectus@rbccm.com; or from UBS Securities LLC, Attention: Prospectus Department, 1285 Avenue of the Americas, New York, New York 10019, or by calling 1-888-827-7275.

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 any such state or other jurisdiction. The capped call transactions described above have not been and will not be registered under the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction and may not be offered or sold in the United States without registration or an applicable exemption from registration requirements. The final terms of the offering will be disclosed in a final prospectus supplement to be filed with the SEC.

About Intercept
Intercept is a biopharmaceutical company focused on the development and commercialization of novel therapeutics to treat non-viral, progressive liver diseases, including primary biliary cholangitis (PBC), nonalcoholic steatohepatitis (NASH), primary sclerosing cholangitis (PSC) and biliary atresia. Founded in 2002 in New York, Intercept now has operations in the United States, Europe and Canada.

Safe Harbor Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the anticipated final terms of the notes and the capped call transactions; the anticipated use of proceeds from the offering; and Intercept’s strategic directives under the caption "About Intercept." These "forward-looking statements" are based on management's current expectations of future events and are subject to a number of important risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: Intercept’s ability to successfully commercialize OcalivaTM in PBC, and Intercept’s ability to maintain its regulatory approval of Ocaliva in the United States for Ocaliva in PBC; the initiation, cost, timing, progress and results of Intercept’s development activities, preclinical studies and clinical trials; the timing of and Intercept’s ability to obtain and maintain regulatory approval of OCA in PBC in countries outside the United States and in indications other than PBC and any other product candidates it may develop such as INT-767; conditions that may be imposed by regulatory authorities on Intercept’s marketing approvals for its product candidates such as the need for clinical outcomes data (and not just results based on achievement of a surrogate endpoint), and any related restrictions, limitations, and/or warnings in the label of any approved product candidates; Intercept’s plans to research, develop and commercialize its product candidates; Intercept’s ability to obtain and maintain intellectual property protection for its product candidates; Intercept’s ability to successfully commercialize OCA in indications other than PBC and its other product candidates; the size and growth of the markets for Intercept’s product candidates and its ability to serve those markets; the rate and degree of market acceptance of any of Intercept’s products, which may be affected by the reimbursement that it may receive for its products from payors; the success of competing drugs that are or become available; the election by Intercept’s collaborators to pursue research, development and commercialization activities; Intercept’s ability to attract collaborators with development, regulatory and commercialization expertise; regulatory developments in the United States and other countries; the performance of third-party suppliers and manufacturers; Intercept’s need for and ability to obtain additional financing; Intercept’s estimates regarding expenses, future revenues and capital requirements and the accuracy thereof; Intercept’s use of cash, short-term investments and the proceeds from the offering; Intercept’s ability to attract and retain key scientific or management personnel; and other factors discussed under the heading "Risk Factors" contained in Intercept’s preliminary prospectus supplement related to the proposed offering filed with the SEC on the date of this press release as well as any updates to these risk factors filed from time to time in its other filings with the SEC. All information in this press release is as of the date of the release, and Intercept undertakes no duty to update this information unless required by law.

CONTACT: For more information about Intercept Pharmaceuticals, please contact: Intercept Pharmaceuticals: Mark Vignola +1-646-747-1000 investors@interceptpharma.com Media inquiries: media@interceptpharma.com Investor inquiries: investors@interceptpharma.com

Source:Intercept Pharmaceuticals, Inc.