Zogenix, Inc. Prices $200.0 Million Convertible Senior Notes Offering

EMERYVILLE, Calif., Sept. 23, 2020 (GLOBE NEWSWIRE) -- Zogenix, Inc. (Nasdaq: ZGNX) today announced the pricing of its offering of $200,000,000 aggregate principal amount of 2.75% convertible senior notes due 2027 (the a??notesa??) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the a??Securities Acta??). The issuance and sale of the notes are scheduled to settle on September 28, 2020, subject to customary closing conditions. Zogenix also granted the initial purchasers of the notes an option to purchase, for settlement within a period of 13 days from, and including, the date notes are first issued, up to an additional $30,000,000 principal amount of notes.
The notes will be senior, unsecured obligations of Zogenix and will accrue interest at a rate of 2.75% per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2021. The notes will mature on October 1, 2027, unless earlier repurchased, redeemed or converted. Before July 1, 2027, noteholders will have the right to convert their notes only upon the occurrence of certain events. From and after July 1, 2027, noteholders may convert their notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. Zogenix will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at Zogenixa??s election. The initial conversion rate is 41.1794 shares of common stock per $1,000 principal amount of notes, which represents an initial conversion price of approximately $24.28 per share of common stock. The initial conversion price represents a premium of approximately 30% over the last reported sale of $18.68 per share of Zogenixa??s common stock on September 23, 2020. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events.The notes will be redeemable, in whole or in part, for cash at Zogenixa??s option at any time, and from time to time, on or after October 7, 2024 and on or before the 40th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of Zogenixa??s common stock exceeds 130% of the conversion price for a specified period of time. The redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. If Zogenix elects to redeem less than all of the notes, at least $50.0 million aggregate principal amount of notes must be outstanding and not subject to redemption as of the relevant redemption notice date.If a a??fundamental changea?? (as defined in the indenture for the notes) occurs, then, subject to a limited exception, noteholders may require Zogenix to repurchase their notes for cash. The repurchase price will be equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.Zogenix estimates that the net proceeds from the offering will be approximately $193.6 million (or approximately $222.7 million if the initial purchasers fully exercise their option to purchase additional notes), after deducting the initial purchasersa?? discounts and commissions and estimated offering expenses. Zogenix intends to use the net proceeds from the offering to fund development and commercialization of Fintepla in Dravet syndrome, Lennox-Gastaut syndrome, and other potential indications, to fund the development of MT1621 in TK2 deficiency and other general corporate purposes, such as working capital and general and administrative expenses.
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