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Exelixis, Inc. (Nasdaq: EXEL) today announced the pricing of its concurrent underwritten public offering of 30 million shares of newly issued common stock at a price to the public of $4.25 per share and $250 million aggregate principal amount of its 4.25% convertible senior subordinated notes due 2019. Exelixis also granted the underwriters a 30-day option to purchase up to an additional 4.5 million shares of its common stock and up to an additional $37.5 million aggregate principal amount of the convertible senior subordinated notes in connection with the offerings. All of the shares and the notes in the offerings are being sold by Exelixis. Exelixis anticipates that its aggregate net proceeds from the concurrent offerings will be $361.9 million after deducting the underwriting discount and estimated offering expenses payable by Exelixis (assuming no exercise of the underwriters' option to purchase additional shares of common stock and notes). The notes will be the general unsecured senior subordinated obligations of Exelixis (except to the extent of an interest escrow account holding net proceeds from the notes offering sufficient to fund, when due, the total aggregate amount of the first six scheduled semi-annual interest payments on the notes, excluding additional interest, if any). The notes will bear interest at a rate equal to 4.25% per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2013. The notes will mature on August 15, 2019.
The notes will be convertible by the holders beginning on May 15, 2019, or earlier upon the occurrence of certain events. The notes will be convertible at an initial conversion rate of 188.2353 shares per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $5.31 per share. The initial conversion price represents a premium of approximately 25% to the public offering price of Exelixis’ shares in the common stock offering. The conversion rate will be subject to adjustment upon certain events, but will not be adjusted for accrued and unpaid interest. Upon conversion, the notes may be settled, at Exelixis' election, in cash, shares of Exelixis common stock, or a combination of cash and shares of Exelixis common stock. Exelixis may redeem some or all of the notes for cash under certain circumstances on or after August 15, 2016.