The Notes will be senior unsecured obligations of ARIAD, and interest will be payable semi-annually. The Notes will be convertible by the holders beginning
In connection with the pricing of the Notes, ARIAD expects to enter into a convertible note hedge transaction with an affiliate of one of the initial purchasers (the "option counterparty"). The convertible note hedge transaction is expected generally to reduce the potential dilution to ARIAD's common stock upon any conversion of Notes and/or offset any cash payments ARIAD may be required to make in excess of the principal amount of converted Notes, in each case, in the event that the market price per share of ARIAD's common stock, as measured under the terms of the convertible note hedge transaction, is greater than the strike price of the convertible note hedge transaction. ARIAD also expects to enter into a warrant transaction with the option counterparty. The warrant transaction could separately have a dilutive effect to the extent that the market value per share of ARIAD's common stock as measured over the applicable valuation period at the maturity of the warrants exceeds the applicable strike price of the warrants.
ARIAD expects that in connection with establishing its initial hedge of the convertible note hedge and warrant transactions, the option counterparty or an affiliate thereof expects to enter into various derivative transactions with respect to ARIAD's common stock concurrently with or shortly after the pricing of the Notes. This activity could increase (or reduce the size of any decrease in) the market price of ARIAD's common stock or the Notes at that time. In addition, ARIAD expects that the option counterparty or an affiliate thereof may modify its hedge positions from time to time by entering into or unwinding various derivatives with respect to ARIAD's common stock or other ARIAD securities in secondary market transactions following the pricing of the Notes and prior to the maturity of the Notes (and are likely to do so during any observation period related to a conversion of the Notes). This activity could also cause or avoid an increase or a decrease in the market price of ARIAD's common stock or the Notes, which could affect the ability of Note holders to convert the Notes and, to the extent the activity occurs during any observation period related to a conversion of the Notes, it could affect the amount and value of the consideration that Note holders will receive upon conversion of the Notes.
ARIAD intends to use a portion of the net proceeds of the offering to pay the cost of the convertible note hedge transaction (after such cost is partially offset by the proceeds from the warrant transaction). ARIAD intends to use the remainder of the net proceeds of the offering for its operations, including, but not limited to sales, marketing, manufacturing and distribution of IclusigŪ (ponatinib); global development of its other product candidates, including clinical trials, product and process development, manufacturing and other activities; discovery research efforts to add to its pipeline of product candidates; and for other general corporate purposes, including, but not limited to repayment or refinancing of indebtedness or other corporate borrowings, capital expenditures and possible acquisitions.
The Notes will be offered to qualified institutional buyers pursuant to Rule 144A under the Act. Neither the Notes nor the shares of ARIAD's common stock issuable upon conversion of the Notes, if any, have been registered under the Act or the securities laws of any other jurisdiction and may not be offered or sold in
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