JWCA advises Novavax on its $325 million convertible and capped call execution

January 2016 | read press release

Transaction Background

JWCA was hired by Novavax to advise on its convertible execution, the first convertible in 2016.  JWCA also assisted the Company with its capped call design, auction process, and overall execution:

• Convertible structure: provided capital structure analysis and advice related to convertible debt issuance and execution

• Capped call design: advised the Company on comparisons between call spreads and capped calls

• Tax: assisted the Company with analysis related to the tax impact of the capped call purchase, particularly in relation to AHYDO rules

• Accounting: helped the company with the accounting review, including the accounting memo for their auditors

• Auction capped call execution: organized an auction process in order to create significant competitive tension between the banks

• Provided advice, support and analysis throughout the negotiation and deal preparation process

Transaction Rationale and use of proceeds

• Novavax will use the net proceeds from the offering to advance the Company’s clinical-stage vaccine candidates, including its recently initiated pivotal Phase 3 clinical trials of its RSV F Vaccine

• The purpose of the offering and the rationale for a convertible structure was to strengthen the balance sheet while minimizing dilution

• Offering enhances Novavax’s balance sheet as the Company engages potential partners in discussions on RSV F Vaccine commercialization rights outside North America and supports development and U.S. commercialization plans

Results

• Company was able to successfully upsize to $325mm (from original deal size of $200mm)

• The negotiation process produced significant cash savings for the Company