Isis Pharmaceuticals, a Carlsbad-based company pioneering in antisense drug discovery, announced they will offer $425 million of convertible senior notes due in 2021. The biotech company, which has several drugs in the development pipeline, has always focused on the research and early development stage before recruiting a marketing partner. Making sure a drug is developed as much as possible before introducing a partner for commercialization is advantageous due to lowered risks of product failure. With the money raised from this planned debt, Isis plan to retain its product ownership for longer and may even give them the option to commercialize the product themselves.
Convertible senior notes by definition contain the option where the note is converted into a predefined amount of the issues shares and has priority over all other debt securities issued by the same organization.
The sale of these convertible senior notes is due to end November 17th 2014 with net proceeds expected to be approximately $413.9 million after deducting discounts and expenses. Following Isis offering, the net proceeds will then be used to fund further development of drugs in the pipeline.
This strategy will allow Isis to get the most value out of its products that it has researched and produced, allowing them to retain control and earn more from commercial revenues. Three lipid drugs in the pipeline are of particular importance to Isis, which they believe are well-suited for this new approach. The drugs are equipped to address lipid disorders in patients with rare diseases which can expand into larger patient populations.