Item 1.01. Entry into a Material Definitive Agreement.
Indenture and Notes
On January 28, 2021, BridgeBio Pharma, Inc. ("BridgeBio") issued an aggregate of
$717.5 million aggregate principal amount of its 2.25% Convertible Senior Notes
due 2029 (the "Notes"), pursuant to an Indenture dated January 28, 2021 (the
"Indenture"), between BridgeBio and U.S. Bank National Association, as trustee
(the "Trustee"), in a private offering to qualified institutional buyers (the
"Note Offering") pursuant to Rule 144A under the Securities Act of 1933, as
amended (the "Securities Act"). The Notes issued in the Note Offering include
$67.5 million aggregate principal amount of Notes sold to the initial purchasers
in (the "Initial Purchasers") pursuant to the exercise in part of the Initial
Purchasers' option to purchase $97.5 million principal amount of additional
Notes. On January 28, 2021, the Initial Purchasers exercised the remaining
portion of their option to purchase $30.0 million principal amount of additional
Notes. The sale of those additional Notes is expected to close on February 2,
2021.
The Notes are senior, unsecured obligations of BridgeBio and will accrue
interest payable semiannually in arrears on February 1 and August 1 of each
year, beginning on August 1, 2021, at a rate of 2.25 % per year. The Notes will
mature on February 1, 2029, unless earlier converted, redeemed or repurchased.
The Notes are convertible into cash, shares of BridgeBio's common stock or a
combination of cash and shares of BridgeBio's common stock, at BridgeBio's
election.
The net proceeds BridgeBio received from the Note Offering are equal to
approximately $701.0 million, after deducting the Initial Purchasers' discount
and estimated offering expenses payable by BridgeBio. In addition, BridgeBio
expects to receive approximately $29.4 million, after deducting the Initial
Purchasers' discount and estimated offering expenses payable by BridgeBio, from
the sale of the additional $30.0 million principal amount of Notes that is
expected to close on February 2, 2021. BridgeBio used approximately
$58.8 million of the net proceeds from the Note Offering to pay the cost of the
Base Capped Call Transactions and the First Additional Capped Call Transactions
described below, and approximately $50.0 million to pay the cost of Repurchases
of shares of its common stock described below. BridgeBio expects to use
approximately $2.5 million of the net proceeds from the sale of the additional
$30.0 million principal amount of additional Notes that is expected to close on
February 2, 2021 to pay the cost of the Second Additional Capped Call
Transactions described below. BridgeBio intends to use the remainder of the net
proceeds from the Note Offering for general corporate purposes, which may
include research and development and clinical development costs to support the
advancement of our drug candidates, including the continued growth of our
commercial and medical affairs capabilities, the conduct of clinical trials and
preclinical research and development activities; working capital; capital
expenditures; repayment of outstanding indebtedness; general and administrative
expenses; and other general corporate purposes. BridgeBio has not entered into
any agreements or commitments with respect to any material acquisitions or
investments at this time that would be financed with any of the net proceeds
from the Note Offering. From time to time, to maintain or increase BridgeBio's
ownership position in its subsidiaries, BridgeBio may make additional
investments in or purchase equity in its subsidiaries. These expectations and
intentions are subject to change.
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A holder of Notes may convert all or any portion of its Notes at its option at
any time prior to the close of business on the business day immediately
preceding November 1, 2028 only under the following circumstances: (1) during
any calendar quarter commencing after the calendar quarter ending on June 30,
2021 (and only during such calendar quarter), if the last reported sale price of
BridgeBio's common stock for at least 20 trading days (whether or not
consecutive) during a period of 30 consecutive trading days ending on, and
including, the last trading day of the immediately preceding calendar quarter is
greater than or equal to 130% of the conversion price on each applicable trading
day; (2) during the five business day period after any five consecutive trading
day period (the "measurement period") in which the "trading price" (as defined
in the Indenture) per $1,000 principal amount of Notes for each trading day of
the measurement period was less than 98% of the product of the last reported
sale price of BridgeBio's common stock and the conversion rate on each such
trading day; (3) if BridgeBio calls such notes for redemption, at any time prior
to the close of business on the second business day immediately preceding the
redemption date; or (4) upon the occurrence of specified BridgeBio corporate
events. On or after November 1, 2028 until the close of business on the second
scheduled trading day immediately preceding the maturity date, a holder may
convert all or any portion of its Notes at any time, regardless of the foregoing
circumstances.
The conversion rate will initially be 10.3050 shares of BridgeBio's common stock
per $1,000 principal amount of Notes (equivalent to an initial conversion price
of approximately $97.04 per share of BridgeBio's common stock). The conversion
rate is subject to adjustment in some events but will not be adjusted for any
accrued and unpaid interest. In addition, following certain corporate events
that occur prior to the maturity date, BridgeBio will, in certain circumstances,
increase the conversion rate for a holder who elects to convert its Notes in
. . .
Item 2.03. Creation of a Direct Financial Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The information provided in Item 1.01 of this Report is hereby incorporated by
reference into this Item 2.03.
Item 3.02. Unregistered Sale of Equity Securities.
The information provided in Item 1.01 of this Report is hereby incorporated by
reference into this Item 3.02.
BridgeBio's offering and sale of the Notes to the Initial Purchasers was made in
reliance on the exemption from registration provided by Section 4(a)(2) of the
Securities Act. BridgeBio relied on this exemption from registration based in
part on representations made by the Initial Purchasers in the purchase agreement
for the Notes, including that the Initial Purchasers would only offer, sell or
deliver the Notes to persons whom they believed to be qualified institutional
buyers within the meaning of Rule 144A under the Securities Act.
The Notes and BridgeBio's common stock issuable upon conversion of the Notes, if
any, have not been registered under the Securities Act and may not be offered or
sold in the United States absent registration or applicable exemption from
registration requirements.
Item 8.01 Other Events.
Share Repurchases
BridgeBio used approximately $50.0 million of the net proceeds from the Note
Offering to repurchase shares of its common stock concurrently with the closing
of the Note Offering on January 28, 2021 from certain of the Initial Purchasers
in privately negotiated transactions effected through one of the Initial
Purchasers or an affiliate thereof concurrently with the pricing of the Notes
(the "Repurchases"). The agreed to purchase price per share of common stock in
the Repurchases is equal to $65.79, which was the last reported sale price per
share of BridgeBio's common stock on the Nasdaq Global Select Market on
January 25, 2021. The Repurchases could have increased (or reduced the size of
any decrease in) the market price of BridgeBio's common stock or the Notes.
Credit Agreement Amendment
On January 25, 2021, BridgeBio and Hercules Capital, Inc. ("Hercules") entered
into a Fifth Amendment to Loan and Security Agreement (the "Credit Agreement
Amendment") to amend BridgeBio's existing Loan and Security Agreement (the
"Credit Agreement"), dated June 19, 2018, as amended, by and among BridgeBio and
certain of its subsidiaries as borrowers, the several banks and other financial
institutions or entities from time to time parties thereto and Hercules, as
administrative agent and collateral agent, to permit the Note Offering, the
Capped Call Transactions and the Repurchases.
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The above description of Credit Agreement Amendment does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Credit Agreement Amendment, a copy of which will be filed as an exhibit to
BridgeBio's Quarterly Report on Form 10-Q for the quarter ending March 31, 2021
and will be incorporated by reference herein.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking
statements are usually identified by the use of words such as "anticipates,"
"believes," "estimates," "expects," "intends," "may," "plans," "projects,"
"seeks," "should," "will," and variations of such words or similar expressions.
BridgeBio intends these forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements contained in Section 27A of the
Securities Act and Section 21E of the Exchange Act and are making this statement
for purposes of complying with those safe harbor provisions. These
forward-looking statements, including statements relating to the anticipated use
of the net proceeds of the Note Offering, the anticipated closing of the
transactions associated with the Initial Purchasers' exercise of the remaining
portion of their option to purchase Additional Notes and BridgeBio's
expectations regarding the effect of the Repurchases and the Capped Call
Transactions, reflect BridgeBio's current views about its plans, intentions,
expectations, strategies and prospects, which are based on the information
currently available to BridgeBio and on assumptions it has made. Although
BridgeBio believes that its plans, intentions, expectations, strategies and
prospects as reflected in or suggested by those forward-looking statements are
reasonable, BridgeBio can give no assurance that the plans, intentions,
expectations or strategies will be attained or achieved. Furthermore, actual
results may differ materially from those described in the forward-looking
statements and will be affected by a number of risks, uncertainties and
assumptions, including, but not limited to, those risks set forth in the Risk
Factors section of BridgeBio's most recent Quarterly Report on Form 10-Q and its
other SEC filings. Moreover, BridgeBio operates in a very competitive and
rapidly changing environment in which new risks emerge from time to time. These
forward-looking statements are based upon the current expectations and beliefs
of BridgeBio's management as of the date of this Current Report on Form 8-K, and
are subject to certain risks and uncertainties that could cause actual results
to differ materially from those described in the forward-looking statements.
Except as required by applicable law, BridgeBio assumes no obligation to update
publicly any forward-looking statements, whether as a result of new information,
future events or otherwise.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description of Exhibit
4.1 Indenture, dated as of January 28, 2021, by and between BridgeBio
Pharma, Inc. and U.S. Bank National Association, as Trustee.
4.2 Form of Global Note, representing BridgeBio Pharma, Inc.'s 2.25%
Convertible Senior Notes due 2029 (included as Exhibit A to the
Indenture filed as Exhibit 4.1).
10.1 Form of Confirmation for Capped Call Transactions.
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