Ebb & Flow
ImClone (IMCL) boosted its war chest by half a billion dollars last week, thanks to a bumped-up convertible note deal. What's more, the company does not expect that it will have to earmark the proceeds to pay off $240 million of notes that mature in February 2005.
The reason is that the 2005 notes are in the money. They convert into stock at $55.09, which is a 16% discount to IMCL's Friday close of $65.77.
"We weren't forced into doing the new debt deal to repay the older notes," said spokesperson David Pitts, who noted that market conditions were favorable for selling debt. The new notes bear 1.375% interest, mature in 2024 and convert into stock at $94.69 per share, a 44% premium over IMCL's Friday's close. The prior notes have a 5.5% coupon.
IMCL wasn't terribly chatty about what it will do with its cash - which now stands at about $787 million - citing the usual avenues of in-licensing and acquisitions. Pitts did say IMCL may spend some on manufacturing infrastructure for colorectal cancer antibody Erbitux.
IMCL slipped $2.18 to $64.50 on 5.3 million shares on Tuesday, when it completed the note deal. The stock recovered on the week, helped by a $3.50 pop to $68 on Wednesday, when Repligen (RGEN) disclosed in an SEC filing that it has sued IMCL, alleging that the manufacture of Erbitux infringes one of its patents. Perhaps IMCL investors took note that the RGEN patent expired on May 5.
RGEN, which said it has filed for an extension of the patent, was up $0.02 to $3.07 on the week.
Speaking of note deals,