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Sarepta Therapeutics, Inc. (NASDAQ:SRPT) disclosed Wednesday that it has entered into privately negotiated agreements to exchange approximately $700 million in aggregate principal amount of its 1.25% Convertible Senior Notes due 2027 for a combination of new 4.875% Convertible Senior Notes due 2030, shares of its common stock, and cash. The debt restructuring comes as the company, with a current market capitalization of $2.01 billion, manages its total debt load of $1.36 billion while maintaining healthy liquidity with a current ratio of 2.89.InvestingPro analysis reveals that while the company is quickly burning through cash, its liquid assets exceed short-term obligations, suggesting strategic timing for this debt restructuring. For deeper insights into Sarepta’s financial health and 11 additional key ProTips, explore the comprehensive Pro Research Report available on InvestingPro.
According to a statement based on a Securities and Exchange Commission filing, holders of the existing notes will receive about $602 million in aggregate principal amount of the new convertible notes—representing $860 in new notes for every $1,000 of principal exchanged—along with shares of Sarepta’s common stock and approximately $123.3 million in cash. The number of shares to be issued will be determined by dividing $110 million by the greater of either the five-day average volume-weighted average price of the stock following the agreement or $16.46 per share.
The new convertible notes are unsecured senior obligations set to mature on September 1, 2030, and carry a 4.875% annual interest rate, payable semiannually beginning March 1, 2026. The notes have an initial conversion rate equivalent to $60.00 per share, which is a 191.5% premium over Sarepta’s closing price of $20.58 on Tuesday. The notes are convertible under specific circumstances before March 1, 2030, and at any time after that date until shortly before maturity. Sarepta may settle conversions with cash, stock, or a combination, at its discretion.
The new notes will be redeemable for cash at Sarepta’s option starting September 6, 2028, if the stock price exceeds 130% of the conversion price for a specified period. In the event of a fundamental change, holders may require Sarepta to repurchase the notes for cash at 100% of principal plus any accrued special interest.
The transaction is expected to close on or about August 28, 2025, pending customary conditions.
Sarepta also announced a private placement agreement with J. Wood Capital Advisors LLC for $20 million in common stock, priced at the greater of the closing price on August 27, 2025, or $14.41 per share. J. Wood Capital Advisors may elect to receive up to 835,765 shares as a fee for advisory services.
All securities will be issued in private transactions to qualified institutional buyers and accredited investors, relying on exemptions from SEC registration.
In other recent news, Sarepta Therapeutics has announced a significant financial maneuver involving the exchange of $700 million in convertible notes due in 2027. The company will issue approximately $602 million in new convertible notes due in 2030, alongside up to 6.7 million shares of common stock and about $123.3 million in cash. Additionally, Sarepta has sold over 9.2 million shares of Arrowhead Pharmaceuticals (NASDAQ:ARWR) in a privately negotiated block trade, expecting to generate at least $174 million in gross proceeds. This sale is part of a strategy to fund a $100 million milestone payment related to its SRP-1003 clinical program for type 1 myotonic dystrophy.
Sarepta has also resumed shipments of its Duchenne muscular dystrophy drug, Elevidys, after the FDA determined that a recent patient death was unrelated to the medication. Jefferies has maintained a Buy rating on Sarepta, with a price target of $35.00, following this development. Meanwhile, TD Cowen reiterated a Hold rating and a $17.00 price target after Sarepta’s webinar, which revealed liver adverse event data for Elevidys. The data indicated that both ambulatory and non-ambulatory patients face similar risks of acute liver injury, though non-ambulatory patients showed a higher risk for liver hospitalizations and acute liver failure in commercial settings.
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