Shares of Mirum Pharmaceuticals fell 2% to $104.64 in extended trading on Tuesday after the company disclosed a private offering of $600 million in convertible bonds maturing in 2032.
The Foster City, California-based drugmaker said a portion of the net proceeds from the offering - combined with the issuance of common stock - will be used to exchange a portion of its outstanding 4% convertible bonds due in 2029. The company added that the balance of the funds raised will be allocated to general corporate purposes.
Earlier in the day, Mirum's stock had closed the regular trading session up 0.7% at $106.88. The shares have appreciated 35% so far this year. Mirum's market capitalization stands at $6.5 billion.
The announcement follows last week’s company report that its rare liver disease treatment volixibat met its primary goal in a mid-stage clinical study. The clinical update and the financing move are separate items disclosed by the company in close succession.
What the transaction entails
According to Mirum's statement, the convertible notes being offered will mature in 2032. The firm intends to use part of the proceeds, alongside newly issued common shares, to repurchase or exchange a portion of its existing 4% convertibles due 2029. The company did not disclose the exact share count or the specific portion of the 2029 bonds that will be targeted for exchange.
Market reaction and context
Investors reacted modestly in extended-hours trading, driving the share price down 2% to $104.64 immediately after the financing news. In regular trading, the stock had closed higher, reflecting positive momentum year to date. Mirum’s mid-stage clinical result for volixibat, announced last week, remains part of the company’s recent news flow.
Implications for stakeholders
- Equity holders may face dilution tied to the planned issuance of common stock to facilitate the exchange of outstanding convertibles.
- The firm’s balance sheet will be affected through an increase in convertible debt tied to the 2032 notes and the reduction of the 2029 convertibles to the extent of the exchange.
- Clinical progress for volixibat was reported separately and continues to be a material development for the company’s pipeline and valuation.
Mirum did not provide further operational or timing details for the offering in its announcement.