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Incyte Corporation (Nasdaq: INCY) today announced its intention to offer, subject to market and other conditions, $350 million aggregate principal amount of convertible senior notes due 2018 and $350 million aggregate principal amount of convertible senior notes due 2020 in a private placement to qualified institutional buyers pursuant to an exemption from the registration requirements of the Securities Act of 1933. Incyte expects to grant the initial purchasers of the notes an option to purchase up to an additional $25 million aggregate principal amount of each series of the notes.
Entities affiliated with Julian C. Baker, a director of the Company, have indicated an interest in purchasing up to $500 million aggregate principal amount of notes in this offering.
The Company intends to use up to $500 million of the net proceeds from this offering to repurchase or otherwise retire a portion of the Company’s 4.75% convertible senior notes due 2015, through open market transactions, negotiated transactions or otherwise. The Company has indicated an interest in repurchasing, and entities affiliated with Mr. Baker have indicated an interest in selling to the Company, convertible notes held by those entities with a value of up to $500 million, in a privately negotiated transaction. The Company intends to use the remainder of the net proceeds from this offering to continue investing in research and development, and for other general corporate purposes.
The notes will bear cash interest, payable semi-annually, and will not be redeemable prior to maturity. The notes will be convertible only during certain periods and subject to certain circumstances, into cash, shares of Incyte’s common stock, or a combination of cash and shares of Incyte’s common stock, at Incyte’s election. Final terms of each series of notes, including interest rates, conversion rates and other terms, will be determined at the time of pricing.