Cubist Pharmaceuticals Down on $125 Million Notes Offering

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Drugmaker Cubist Pharmaceuticals (CBST) was down 12.6% in early trading as it completed the private placement of $125 million of 5.5% convertible subordinated notes, due 2008.

Cubist said it has also granted the initial purchasers a 45-day option to purchase an additional $50 million in notes, convertible into common stock at $47.20 per share, vs. Monday's closing price of $43.

The company said it will use the proceeds for clinical trials and marketing of its antibiotic Cidecin, pre-clinical programs for other drugs, its lipopeptide drug-discovery program, and other research and development, working capital and general corporate purposes.