Aa
Vetex goes to the well
at least Boger has made millions in the last 6 months exercising options and dumping shares....Funny how he managed to do that prior to aditional dilution and drop in stock price..
Speaking of dilution:
Vertex Pharmaceuticals Announces Proposed Concurrent Public Offerings of Common Stock and Convertible Senior Subordinated Notes
Monday February 11, 5:01 pm ET
CAMBRIDGE, Mass.--(BUSINESS WIRE)--Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX - News) today announced that it intends to offer, subject to market and other conditions, 6,000,000 shares of its common stock in an underwritten public offering under an automatically effective shelf registration statement on file with the Securities and Exchange Commission. Vertex intends to grant the underwriters an over-allotment option to purchase up to an additional 900,000 shares of its common stock.
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Concurrently with the offering of its common stock, Vertex also intends to offer, subject to market and other conditions, $250.0 million aggregate principal amount of convertible senior subordinated notes due 2013 in an underwritten public offering under a separate automatically effective shelf registration statement on file with the Securities and Exchange Commission. Vertex also expects to grant the underwriters an over-allotment option to purchase up to $37.5 million aggregate principal amount of additional notes on the same terms and conditions.
The common stock offering and the note offering are being conducted as separate public offerings, and the offerings are not contingent upon each other.
The price of the common stock and the interest rate, conversion price, and other terms of the notes will be determined by negotiations between Vertex and the underwriters upon the pricing of the offerings.
Merrill Lynch, Pierce, Fenner & Smith Incorporated is acting as the underwriter in the offerings.
This press release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. Any offer of the securities will be made only by means of a prospectus, forming a part of the effective registration statements. A copy of the applicable prospectus can be obtained from Merrill Lynch's prospectus department, at 4 World Financial Center, New York, NY 10080, 212-449-1000.
Speaking of dilution:
Vertex Pharmaceuticals Announces Proposed Concurrent Public Offerings of Common Stock and Convertible Senior Subordinated Notes
Monday February 11, 5:01 pm ET
CAMBRIDGE, Mass.--(BUSINESS WIRE)--Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX - News) today announced that it intends to offer, subject to market and other conditions, 6,000,000 shares of its common stock in an underwritten public offering under an automatically effective shelf registration statement on file with the Securities and Exchange Commission. Vertex intends to grant the underwriters an over-allotment option to purchase up to an additional 900,000 shares of its common stock.
ADVERTISEMENT
Concurrently with the offering of its common stock, Vertex also intends to offer, subject to market and other conditions, $250.0 million aggregate principal amount of convertible senior subordinated notes due 2013 in an underwritten public offering under a separate automatically effective shelf registration statement on file with the Securities and Exchange Commission. Vertex also expects to grant the underwriters an over-allotment option to purchase up to $37.5 million aggregate principal amount of additional notes on the same terms and conditions.
The common stock offering and the note offering are being conducted as separate public offerings, and the offerings are not contingent upon each other.
The price of the common stock and the interest rate, conversion price, and other terms of the notes will be determined by negotiations between Vertex and the underwriters upon the pricing of the offerings.
Merrill Lynch, Pierce, Fenner & Smith Incorporated is acting as the underwriter in the offerings.
This press release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. Any offer of the securities will be made only by means of a prospectus, forming a part of the effective registration statements. A copy of the applicable prospectus can be obtained from Merrill Lynch's prospectus department, at 4 World Financial Center, New York, NY 10080, 212-449-1000.
Seems to me selling pressure has been created with the $287.5 million convertible placement. With a closing price of $18.40/sh and a convertible price of $23.14/sh, pretty tempting to buy the bond-convert to stock and sell the stock for a quick $4.75/sh riskless profit...
Or buy the bond and short the stock...short could be covered with the converted shares....and your still being paid 4.75% on the bond...should create some interesting arb trades..
"The notes are convertible, at the option of the holder, at any time on or prior to the close of business on the second business day immediately preceding the stated maturity date, into shares of our common stock at a conversion rate of 43.2171 shares per $1,000 principal amount of notes, which is equal to a conversion price of approximately $23.14 per share. **********The conversion rate is subject to adjustment in certain circumstances." I've yet to find what those "circumstances" are...didn't spot it in the prospectuses..maybe I missed it?
http://www.secinfo.com/$/SEC/Registrant.asp?CIK=875320
Or buy the bond and short the stock...short could be covered with the converted shares....and your still being paid 4.75% on the bond...should create some interesting arb trades..
"The notes are convertible, at the option of the holder, at any time on or prior to the close of business on the second business day immediately preceding the stated maturity date, into shares of our common stock at a conversion rate of 43.2171 shares per $1,000 principal amount of notes, which is equal to a conversion price of approximately $23.14 per share. **********The conversion rate is subject to adjustment in certain circumstances." I've yet to find what those "circumstances" are...didn't spot it in the prospectuses..maybe I missed it?
http://www.secinfo.com/$/SEC/Registrant.asp?CIK=875320
Thanks for posting that. Like I said, it is justifiable to get the cash needed to continue research. I suppose the smart investor would watch closely all the highs and lows and buy only shortly before 2011. I, on the other hand, am not the smart investor. I bought when it was at its all time high, and then again about a week before this new share issue was announced. LOL - don't buy stock because of emotions they say...... oh well.
Kath
Kath
From the Motley Fool.
"Vertex (Nasdaq: VRTX) caught investors by surprise with the scale of its new stock offering --$250 million in convertible notes with a $37.5 million overallotment, and 6 million new shares plus a 900,000-share overallotment. This represents about 5.2% dilution to the current float and is a stark reminder that drug development is very expensive. However, the opportunity in treating hepatitis C should prove worthwhile.
Vertex forecasts a 2008 loss of $320 million to $350 million (excluding one-time items), which is similar to the $325 million loss in 2007. It ended the year with about $468 million in cash and investments. If we assume a similar burn rate of more than $300 million annually until telaprevir launches in 2011, Vertex may burn through $900 million before telaprevir revenue starts to come in. After the current financing, it will have almost that much on hand. That suggests there may be another financing in the next two or three years, but Vertex shouldn't be making a habit of this."
"Vertex (Nasdaq: VRTX) caught investors by surprise with the scale of its new stock offering --$250 million in convertible notes with a $37.5 million overallotment, and 6 million new shares plus a 900,000-share overallotment. This represents about 5.2% dilution to the current float and is a stark reminder that drug development is very expensive. However, the opportunity in treating hepatitis C should prove worthwhile.
Vertex forecasts a 2008 loss of $320 million to $350 million (excluding one-time items), which is similar to the $325 million loss in 2007. It ended the year with about $468 million in cash and investments. If we assume a similar burn rate of more than $300 million annually until telaprevir launches in 2011, Vertex may burn through $900 million before telaprevir revenue starts to come in. After the current financing, it will have almost that much on hand. That suggests there may be another financing in the next two or three years, but Vertex shouldn't be making a habit of this."
Proactive, I have mixed feelings about this, but if it gives the company the infusion of cash it needs to continue research, it may not be all bad. Haven't they lengthened the time it will take for them to release Telaprevir? To me, that could mean they want to try to work out the problems like the skin issues. I would rather they research and test the fool out of it now and come up with a product that will be safe and effective than rushing out putting it out on the market. Fools like me are ready to put their money down in a heart beat for that drug. Someone has to make sure thta it is ready. From an investor prespective I was pissed, thinking that my stock will go down (more) but from a prospective patient point of view this is not a bad thing.
frijole
frijole
Congrats on your SVR!!! Hopefully vx 950 will result in many more to come.....
Win,win....more patients will get svr, management can continue to rape shareholders using the company as their personal piggy bank...Heck they may even get to give themselves another $60,000,000 in stock based comp in 2008 (vbg!) Wonder if they will continue to report it as research and development? ;^)...as to shareholders they appear to win also, they get to keep the bag they're left holding..
Win,win....more patients will get svr, management can continue to rape shareholders using the company as their personal piggy bank...Heck they may even get to give themselves another $60,000,000 in stock based comp in 2008 (vbg!) Wonder if they will continue to report it as research and development? ;^)...as to shareholders they appear to win also, they get to keep the bag they're left holding..
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