Intercept Pharmaceuticals Inc. (ICPT) shares fell -8.60% in the current market to trade at $15.31. The ICPT stock closed the previous session at $16.75. There were 5.09 million shares traded on ICPT stock, which was higher than the average daily volume of 0.66 million shares over the past 50 days. ICPT stock has fallen -68.29% over the last 12 months and has risen by 0.6% over the past week. The ICPT stock has fallen -7.97% during the past three months, and -52.22% during the past six months. ICPT had a market capitalization of $564.48 million and its outstanding shares were 33.18 million. Since announcing an agreement about convertible notes, ICPT stock has plummeted.
ICPT has agreed to what?
As a biopharmaceutical company, Intercept develops and commercializes therapeutics that treat progressive liver diseases, like primary biliary cholangitis (PBC) and nonalcoholic steatohepatitis (NASH). Intercept was founded in New York in 2002 and has operations in the United States, Europe, and Canada.
As part of the agreement, Intercept has entered into private negotiations with certain holders of its existing 3.25% Convertible Senior Notes due 2023. ICPT also negotiated a deal with holders of 2.00% Convertible Senior Notes due 2026.
- ICPT has agreed that an aggregate amount of $306.5 million principal amount of 2023 Notes and an aggregate amount of $114.7 million principal amount of 2026 Notes will be exchanged.
- The notes will be exchanged for a new series of ICPT’s Convertible Senior Secured Notes due in 2026.
- ICPT will also sell new notes for cash in the amount of approximately $117.6 million.
- Transactions are expected to close promptly, provided customary closing conditions are met.
- A total of approximately $500.0 million of New Notes is expected to be issued by ICPT to the participating holders.
- Net of advisory fees and expenses, the ICPT estimates cash proceeds of approximately $107.3 million.
- In addition to general corporate expenses, ICPT intends to use the net proceeds for other corporate purposes.
- A cash reserve of $75.7 million may be used to repurchase shares of the Company’s common stock in private transactions at a price per share of $16.75, the closing price of the Company’s common stock on August 10, 2021.
- In addition, these repurchases could prevent a decline in ICPT common stock or the New Notes market price and ICPT may buy back and retire additional 2023 notes.
Post-transaction position of ICPT Stock:
Intercept (ICPT) expects that its debt and share count profiles will change following the Transactions and Buyback. ICPT will succeed in retiring 66.6% of its 2023 Notes. As a result of the transaction, the number of ICPT shares outstanding will be reduced by 4.52 million shares, or 13.6%, from 33.2 million to 28.7 million.
