The Notes will mature on
The initial conversion rate of the Notes will be 143.7815 shares of Kadmon's common stock per
If a "fundamental change" (as defined in the indenture governing the Notes) occurs, then subject to certain conditions and limited exceptions, holders may require Kadmon to repurchase their Notes at a cash repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, upon certain corporate events that occur prior to the maturity date of the Notes or if Kadmon delivers a redemption notice in respect of some or all of the Notes, Kadmon will, under certain circumstances, increase the conversion rate of the Notes for holders who elect to convert their Notes in connection with such a corporate event or convert their Notes called for redemption during the related redemption period, as the case may be.
In connection with the pricing of the Notes, Kadmon entered into capped call transactions with one or more financial institutions (the "option counterparties"). The cap price of the capped call transactions relating to the Notes will initially be approximately
The capped call transactions cover, subject to customary adjustments, the number of shares of common stock initially underlying the Notes. The capped call transactions are expected to generally reduce the potential dilutive effect on Kadmon's common stock upon conversion of the Notes or at Kadmon's election (subject to certain conditions) offset any cash payments Kadmon is required to make in excess of the aggregate principal amount of converted Notes, with such reduction and/or offset subject to a cap.
In connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to enter into various derivative transactions with respect to Kadmon's common stock and/or purchase shares of Kadmon's common stock concurrently with or shortly after the pricing of the Notes (and, if applicable, the exercise by the initial purchaser of its over-allotment option). This activity could increase (or reduce the size of any decrease in) the market price of Kadmon's common stock or the Notes at that time. In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Kadmon's common stock and/or purchasing or selling Kadmon's common stock or other securities issued by Kadmon in secondary market transactions following the pricing of the Notes and prior to the maturity of the Notes (and are likely to do so on each exercise date of the capped call transactions, which are expected to occur during the 40 trading day period beginning on the 41st scheduled trading day prior to the maturity date of the Notes, or following any early termination of any portion of the capped call transactions in connection with any repurchase, redemption or early conversion of the Notes). This activity could also cause or avoid an increase or a decrease in the market price of Kadmon's common stock or the Notes, which could affect a noteholder's ability to convert the Notes and, to the extent the activity occurs during any observation period related to a conversion of the Notes, it could affect the number of shares and value of the consideration that a noteholder will receive upon conversion of the Notes.
In addition, if any such capped call transaction fails to become effective, whether or not this offering of the Notes is completed, the option counterparties thereto may unwind their hedge positions with respect to Kadmon's common stock, which could adversely affect the value of Kadmon's common stock and, if the Notes have been issued, the value of the Notes.
Kadmon estimates that the net proceeds from the offering will be approximately
Kadmon intends to use a portion of the proceeds to prepare to commercialize belumosudil for chronic graft-versus-host disease in
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of Kadmon. Any offers of the Notes will be made only by means of a private offering memorandum. The offer and sale of the Notes and any shares of Kadmon's common stock issuable upon conversion of the Notes have not been, and will not be, registered under the Securities Act or the securities laws of any other jurisdiction, and the Notes and such shares may not be offered or sold in
Kadmon is a clinical-stage biopharmaceutical company that discovers, develops and delivers transformative therapies for unmet medical needs. Kadmon's clinical pipeline includes treatments for immune and fibrotic diseases as well as immuno-oncology therapies.
Forward Looking Statements
This press release contains forward-looking statements. Such statements may be preceded by the words "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "targets," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions. These forward-looking statements include, without limitation, statements regarding the completion and timing of the proposed offering, the intended use of the proceeds, the anticipated effects of entering into the capped call transactions described above and the actions of the option counterparties and their respective affiliates. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Among those risks and uncertainties are risks related to market conditions, including market interest rates, and the trading price and volatility of Kadmon's common stock. We believe that these factors also include, but are not limited to, (i) the initiation, timing, progress and results of our preclinical studies and clinical trials, and our research and development programs; (ii) our ability to advance product candidates into, and successfully complete, clinical trials; (iii) the impact of the COVID-19 pandemic on our business, workforce, patients, collaborators and suppliers, including delays in anticipated timelines and milestones of our clinical trials and on various government agencies who we interact with and/or are governed by; (iv) our reliance on the success of our product candidates; (v) the timing or likelihood of regulatory filings and approvals, including the acceptance of our NDA for belumosudil, especially in light of the COVID-19 pandemic; (vi) our ability to expand our sales and marketing capabilities; (vii) our ability to expand our sales and marketing capabilities; (viii) the commercialization, pricing and reimbursement of our product candidates, if approved; (ix) the implementation of our business model, strategic plans for our business, product candidates and technology; (x) the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology; (xi) our ability to operate our business without infringing the intellectual property rights and proprietary technology of third parties; (xii) costs associated with defending intellectual property infringement, product liability and other claims; (xiii) regulatory developments in