By Marisa Wong
Los Angeles, Sept. 27 – Xeris Biopharma Holdings, Inc. and wholly owned subsidiary Xeris Pharmaceuticals, Inc. entered into separate privately negotiated exchange agreements on Sept. 26 with some holders of the subsidiary’s outstanding 5% convertible senior notes due 2025, according to a Wednesday press release and an 8-K filing with the Securities and Exchange Commission.
Xeris Biopharma will exchange $31,975,000 aggregate principal amount of the existing notes for $33,574,000 aggregate principal amount of new 8% convertible senior notes due July 15, 2028. The new notes will be issued by Xeris Biopharma and guaranteed by Xeris Pharmaceuticals.
The exchange transactions are expected to close on Sept. 29, subject to customary closing conditions.
The initial conversion rate for the new notes is 326.7974 shares of Xeris common stock per $1,000 principal amount of notes, equivalent to an initial conversion price of roughly $3.06 per share, which represents a premium of about 68% over the last reported sale price of Xeris common stock on Sept. 26.
The new notes will be callable, in whole but not in part, at any time on or after July 20, 2026 at par plus accrued interest to but excluding the redemption date, but only if the last reported sale price per share of Xeris common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date Xeris sends the related redemption notice and (ii) the trading day immediately before the date Xeris sends such notice.
The new notes will also be putable upon a fundamental change. The purchase price would be par plus accrued interest to but excluding the repurchase date.
In connection with certain corporate events or if Xeris issues a notice of redemption, Xeris will, in some cases, increase the conversion rate for holders of new notes who elect to convert their notes in connection with that corporate event or convert their new notes called for redemption for a specified period of time.
“We are very pleased to have exchanged approximately two-thirds of our 5% convertible senior notes due in 2025 for 8% convertible senior notes due in July 2028. Importantly, we were able to achieve this three-year extension without changing the original $3.06 conversion price,” chief financial officer Steven Pieper said in the press release.
“With only $15 million of the 2025 convertible notes remaining, coupled with our healthy cash position, we have created significant financial flexibility to run our business with no other debt coming due until 2027,” Pieper added.
Evercore Group LLC acted as placement agent and financial adviser to the company in connection with the exchange transactions.
Xeris is a biopharmaceutical company based in Chicago.
New notes
| Issuer: | Xeris Biopharma Holdings, Inc.
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| Guarantor: | Xeris Pharmaceuticals, Inc.
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| Amount: | $33,574,000
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| Issue: | Convertible senior notes
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| Maturity: | July 15, 2028
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| Placement agent: | Evercore Group LLC
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| Trustee: | U.S. Bank Trust Co., NA
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| Coupon: | 8%
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| Conversion price: | $3.06
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| Call option: | In whole at any time on or after July 20, 2026 at par, but only if last reported share price exceeds 130% of conversion price on (i) each of at least 20 trading days, whether or not consecutive, during 30 consecutive trading days ending on, and including, trading day immediately before redemption notice date and (ii) trading day immediately before redemption notice date
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| Put option: | At par upon a fundamental change
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| Settlement date: | Sept. 29
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| Distribution: | Rule 144A
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