Incyte Corporation (Nasdaq:INCY) today announced the pricing of a total offering of $700 million aggregate principal amount of its convertible senior notes, consisting of $350 million aggregate principal amount of 0.375% convertible senior notes due 2018 (the 2018 notes) and $350 million aggregate principal amount of 1.25% convertible senior notes due 2020 (the 2020 notes). The notes are being offered in a private placement to qualified institutional buyers pursuant to an exemption from the registration requirements of the Securities Act of 1933. Incyte has granted the initial purchasers of the notes a 30-day 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 agreed to purchase $500 million aggregate principal amount of notes in this offering, consisting of $250 million aggregate principal amount of the 2018 notes and $250 million aggregate principal amount of the 2020 notes.
The Company intends to use a portion of the net proceeds from this offering to repurchase a portion of the outstanding 4.75% convertible senior notes due 2015 of the Company (2015 notes) held by entities affiliated with Mr. Baker, in one or more privately negotiated transactions. The Company has agreed to purchase 2015 notes from the Baker entities for an aggregate consideration, including accrued interest, of approximately $475 million, or a total of approximately $500 million if the option granted to the initial purchasers in respect of each series of notes is exercised in full. The repurchase would result in the retirement of approximately $111.5 million aggregate principal amount of the 2015 notes (approximately $117.4 million if the option granted to the initial purchasers in respect of each series of notes is exercised in full). 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.
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