aibioBridgeBio raises up to $1 billion in convertible preferred from Sixth Street, KKR unit
Tickers BBIO
The 7% preferred converts at $137.79 a share and is aimed at supporting present and upcoming launches. $933.9 million was funded at close.
Key facts
- Company
- BridgeBio Pharma, Inc. (NASDAQ: BBIO)
- News type
- Financings
- Primary source
- BridgeBio Pharma
BridgeBio Pharma said on July 1 that it raised up to $1 billion in convertible preferred equity from Sixth Street and HealthCare Royalty, a business of KKR. The company said the financing is meant to accelerate its present and upcoming launches, and it pointed to three potential U.S. launches over the next 12 months.
The release says $933.9 million was funded at closing: $800 million from Sixth Street and $133.9 million from HealthCare Royalty. It did not give a specific split of proceeds.
The details
The security is Series A Cumulative Convertible Participating Preferred Stock. It has no scheduled maturity, and holders cannot demand redemption. The initial dividend is 7.00%, payable in cash or in kind at BridgeBio's election. The initial conversion price is $137.79 per share, which the company says is a premium of more than 100% to the 30-day volume-weighted average price. The conversion price rises to $153.10 from the fifth anniversary. BridgeBio may redeem the stock for cash or, in some circumstances, convert it to common.
Neil Kumar, BridgeBio's chief executive, said in the release that the company was "privileged to be partnering with Sixth Street and HealthCare Royalty."
Context
The financing came about six weeks before the second-quarter report on Aug. 10. As of June 30, BridgeBio held $720.2 million in cash, cash equivalents and marketable securities, a figure that excludes the preferred raise. The company posted a second-quarter net loss attributable to common stockholders of $152.2 million, or $0.78 a share, on total revenue of $243.7 million.
The release does not name the launches. BridgeBio has three applications under FDA review: BBP-418 for LGMD2I/R9, encaleret for ADH1 and infigratinib for achondroplasia. BridgeBio has said the FDA will act on BBP-418 by Nov 27, 2026, on infigratinib by Feb 4, 2027, and on encaleret by May 8, 2027. Attruby, its approved heart drug, is already generating revenue: $222.4 million in the second quarter.
What it means for investors
Convertible preferred avoids a debt maturity and defers dilution, which suits a company with growing sales but still operating at a loss. It has costs. A 7% dividend paid in kind adds to the claim ahead of common shareholders, and the stock is described as participating. Conversion at $137.79 only matters if the common stock trades above that level, and the company's disclosure does not say how much of the dividend it plans to pay in cash.
The structure shows what BridgeBio is paying for flexibility. Three FDA decisions between November and May will lead to launches that need money, and the company chose to raise on these terms before the decisions arrived. Whether that was cheap depends on how the approvals go. The dividend accrues either way.
The BIO/Informa/QLS base rates suggest most applications of this kind are approved, 93.6% in non-oncology rare disease. They say nothing about uptake.
What to watch
The first test is the Nov 27, 2026 FDA date for BBP-418, followed by Feb 4, 2027 for infigratinib and May 8, 2027 for encaleret. The third-quarter report should show whether the dividend is being paid in kind or cash.