$100m (15m) sen unsec cb coming tonight from GS/JPM. Terms: 7yr, 3-3.5% up 27.5-32.5%, sc y 4 @130%, full pctns. UOP = repay debt. Biotech equity +dvd structure. Catalyst; pipeline = 2x cancer drugs exp 4 ph3 trials late 2013 and 2 x inflame drugs in ph2, data on asthma trials late 2013, possible Ovarian cancer ph3. Co also partners w/majors on 9 programs (AMGN/CELG/NOVN). Proforma # not great (see credit color) but this is not why you buy these. Stock already +45% this yr but again, with so many catalyst ahead this is less important. Sanity check = model = L+700/35% = 103. Rate move = greater sensitivity to 7y+ paper so not ideal but expect equity x/over demand. Small deal w/interesting story will overcome secondary malaise.
Biotech focused on oncology drugs
PF Cash $91m
PF Debt $115m
LTM EBITDA -36m
LTM FCF -85m
Yrs cash = 1.1 yrs
Mkt Cap = $675m
ARRY has no products on the market. Pipeline is 2 cancer drugs expected to enter phase 3 late 2013 & two phase 2 inflamation drugs. Expect data on asthma trials late 2013, possibly lead to a partner. Receiving partnership rev from Amgen, Novartis, Celgene, & Genetech thru 9 programs. Expect 3 or 4 to enter phase 3 by year end, possibly undertake their own phase 3 for ovarian cancer, also. Proceeds to repay credit facility due 06/14 and 06/15. Add’l sec term loan due 10/14, FCF +ve not expected in foreseeable future. Our assign spread L+700