Biotech Values

[DewDiligence]

VRTX Prices Stock and Note Offerings

http://biz.yahoo.com/bw/080212/20080212006579.html?.v=1

[The terms are not especially favorable for the company, IMO. The stock offering is 6.9M sh (including the dealer’s over-allotment) @$17.14, Tuesday’s closing price; the convertible pays 4.75% interest and converts @$23.14/sh (a 35% premium). If all $287.5M of the notes (including the dealer’s over-allotment) end up converting, they will produce 12.4M common shares. The stock and convertible offerings increase the fully-diluted share count by about 14%.]

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Tuesday February 12, 8:47 pm ET

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX ) today announced that it has entered into an agreement to sell 6,000,000 shares of its common stock in an underwritten offering at a price to the public of $17.14 per share. Vertex has granted the underwriters an option to purchase up to an additional 900,000 shares of Vertex common stock on the same terms and conditions to cover over-allotments, if any.

Vertex also announced today, concurrent with its agreement to sell shares of common stock, that it has entered into an agreement to sell $250.0 million aggregate principal amount of 4.75% convertible senior subordinated notes due 2013. Vertex has granted the underwriters an option to purchase up to an additional $37.5 million aggregate principal amount of notes on the same terms and conditions to cover over-allotments, if any.

The notes will be convertible by holders into shares of Vertex common stock at an initial conversion rate of 43.2171 shares of common stock per $1,000 principal amount of notes (subject to adjustment in certain circumstances), which represents an initial conversion price of approximately $23.14 per share.
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