Vaxcyte launches $500M stock offering, plus $500M in convertible notes
What's the deal? Vaxcyte, a clinical-stage vaccine company listed on the Nasdaq, has launched two underwritten public offerings: $500 million in common stock and pre-funded warrants, and $500 million in convertible senior notes due 2032. The two offerings are separate, and neither is contingent on the other.
The details: Underwriters hold a 30-day option to buy up to an additional $75 million of shares and up to $75 million more in notes to cover over-allotments. The notes are senior, unsecured obligations that mature on October 15, 2032, with interest paid semi-annually and conversions settled in cash, shares, or a mix at Vaxcyte's election.
Who's involved? JefferiesDealroom has a profile for this one. Try Dealroom →, Leerink PartnersDealroom has a profile for this one. Try Dealroom →, BofA SecuritiesDealroom has a profile for this one. Try Dealroom →, Evercore ISIDealroom has a profile for this one. Try Dealroom →, Goldman SachsDealroom has a profile for this one. Try Dealroom → and Guggenheim SecuritiesDealroom has a profile for this one. Try Dealroom → are joint book-running managers on the equity offering, with MizuhoDealroom has a profile for this one. Try Dealroom → as bookrunner and BTIGDealroom has a profile for this one. Try Dealroom → as lead manager. A similar syndicate is managing the note offering, with J. Wood Capital AdvisorsDealroom has a profile for this one. Try Dealroom → advising Vaxcyte.
Why now? Raising capital through both equity and debt lets a clinical-stage company fund development without relying on a single instrument. Vaxcyte cautioned the offerings are subject to market conditions, "and there can be no assurance as to whether or when either offering may be completed."
What could go wrong? As a clinical-stage firm, Vaxcyte has yet to prove a commercial product, and the convertible notes add leverage that must be repaid, redeemed, or converted by 2032. A "fundamental change" event could force Vaxcyte to repurchase the notes for cash.
The signal: At $500 million, the equity raise ranks in the top 3% of all post-IPO equity rounds for US health companies, out of a sample of 3,834. It is a sign of continued investor appetite for scaling vaccine developers through the public markets.
Read more: finance.minyanville.com
Image credit: Vaxcyte
