BioMarin Pharmaceutical Inc.
) announced that it intends to raise funds through a public
offering. The company intends to offer $600 million of its senior
subordinated convertible notes. The offering consists of two
tranches; viz., Notes worth $300 million due in 2018 and Notes
worth $300 million due in 2020. The company also intends to
provide an over-allotment option to the underwriters for
purchasing an additional $70 million worth of notes.
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BioMarin stated in its press release that the Notes will be
convertible into its common stock at a price which has not yet
been determined. BioMarin intends to utilize the net proceeds
from the offering for general corporate purposes, including its
pipeline development. Moreover, the company intends to use some
of the money to cover the cost of the capped call transactions.
The call transactions are expected to bring down the potential
dilution to the company's common stock following conversion of
the relevant Notes in excess of the principal amount of the
We note that BioMarin has an interesting pipeline with multiple
pipeline related news coming up. The utilization of a portion of
the funds raised through this offering will further boost the
company's pipeline development efforts. The successful
development and commercialization of the robust pipeline will
help drive long-term growth at BioMarin, which currently has four
BioMarin currently carries a Zacks Rank #3 (Hold). Currently,
companies which look attractive include
Isis Pharmaceuticals, Inc.
Alexion Pharmaceuticals, Inc.
). Actelion and Isis carry a Zacks Rank #1 (Strong Buy),
while Alexion is a Zacks #2 Ranked (Buy) stock.