Nuvation Bio Prices Upsized $250 Mln Offering Of Convertible Notes; Stock Down
(RTTNews) - Nuvation Bio Inc. (NUVB), an oncology company, priced an upsized offering of $250 million aggregate principal amount of 0.75% convertible senior notes due in 2032. The aggregate principal amount was increased from the previously announced offering size of $200 million. The net proceeds are estimated at approximately $241.2 million, or approximately $277.6 million if the underwriters exercise their overallotment option in full. The sale of the notes is expected to close on June 30, 2026.
Nuvation Bio expects to use the net proceeds to pay the costs of the capped call transactions, including full repayment of all obligations under its senior secured loan agreement, and for general corporate purposes, working capital, operating expenses, capital expenditures, and general and administrative expenses.
In addition, Nuvation Bio granted the underwriters a right to purchase an additional $37.5 million in aggregate principal amount of notes.
The company noted that the notes will be general unsecured obligations of Nuvation Bio and will accrue interest payable semiannually in arrears on January 1 and July 1 of each year, beginning on January 1, 2027, at a rate of 0.75% per year. The notes will mature on July 1, 2032, unless earlier converted, redeemed or repurchased.
Nuvation Bio may not redeem the notes prior to July 6, 2029. Nuvation Bio may redeem them at 100% of the principal plus accrued interest if its Class A stock trades at or above 130% of the conversion price for at least 20 of 30 consecutive trading days. If only part of the notes is redeemed, at least $75 million in principal must remain outstanding.
In the event Nuvation Bio undergoes a fundamental change, investors may require Nuvation Bio to repurchase, for cash, all or any portion of their notes at a fundamental change repurchase price equal to 100% of the principal amount of the notes plus accrued and unpaid interest.
Concurrently with the pricing of the notes, Nuvation Bio entered into capped call transactions with an affiliate of one of the underwriters and certain other financial institutions. Capped call transactions are generally expected to reduce potential dilution of Class A common stock upon conversion of the Notes and/or to offset any cash payments that Nuvation Bio is required to make in excess of the principal amount of the converted notes.
The cap price for the notes will initially be $10.4580, representing an 80.0% premium over the last reported sale price of the Class A common stock on the New York Stock Exchange on June 25, 2026.
In addition, the financial institutions and their affiliates may continue derivative transactions and Class A common stock to manage their hedge positions after the notes are priced.
Jefferies LLC, Citigroup and Cantor Fitzgerald & Co. are acting as joint bookrunning managers for the offering.
NUVB has traded between $1.87 and $9.75 over the last year. The stock closed Thursday's trade at $5.81, down 10.06%.
In the overnight market, NUVB is down at $5.74, down 1.20%.
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