Tuesday, August 7, 2012

Exelixis shares fall on stock, debt offering news

Exelixis Inc. plans to offer 20 million shares and $225 million in debt, the South San Francisco biotech company said Monday.

The company (NASDAQ: EXEL), which could win approval in late November for its cancer drug cabozantinib, saw its stock fall 13 percent after the news. On the day, Exelixis stock lost 73 cents, closing at $4.85 per share.

Exelixis said it expects to grant underwriters 30-day options to buy up to an additional 3 million shares of common stock and up to an additional $33.8 million in notes.

The debt is in the form of convertible senior subordinated notes due in 2019.

Goldman, Sachs & Co. and Cowen and Co. are joint book-running managers of the concurrent offerings, and Piper Jaffray & Co., Stifel Nicolaus Weisel and William Blair & Co. LLC are co-managers for the common stock offering. Goldman and Cowen are joint lead managers of the note offering, with Citigroup, Credit Suisse Securities LLC and Morgan Stanley & Co. LLC as co-managers.

Cabozantinib, or "cabo," could be approved Nov. 29 by the Food and Drug Administration to treat patients with medullary thyroid cancer. It would be Exelixis' first approved drug as well as an entry to products targeting other types of cancer, such as prostate, kidney, breast and liver cancers.

Ron Leuty covers biotech, higher education and China for the San Francisco Business Times.

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