aibioViridian raises $394 million in convertible notes and stock, repays Hercules loan
Tickers VRDN
The company sold $250 million of 1.75% notes due 2032 and shares at $17.00 ahead of its first approval. It used part of the money to pay off about $55.1 million of term debt.
Key facts
- Company
- Viridian Therapeutics, Inc. (NASDAQ: VRDN)
- News type
- Financings
- Primary source
- Viridian Therapeutics (SEC Form 8-K)
Viridian Therapeutics closed a combined convertible note and stock offering on May 11, days after positive phase 3 results for its second thyroid eye disease (TED) drug. The company later put gross proceeds at $394 million.
The deal had two parts. Viridian sold $250 million of 1.75% convertible senior notes due 2032, including the underwriters' full $25 million option, and 7,352,942 shares at $17.00 each. Jefferies, Leerink Partners and Goldman Sachs led both offerings, with underwriting agreements signed on May 6.
The details
Net proceeds from the notes were about $242.0 million. Net proceeds from the share sale were about $117.0 million, and underwriters had a 30-day option to buy 1,102,941 more shares.
The notes pay interest twice a year, on May 15 and November 15, starting November 15, 2026. Holders can convert only under certain conditions before maturity, including when the share price exceeds 130% of the conversion price for a set period, starting after the quarter ending September 30, 2026. Viridian can redeem the notes from May 20, 2030 if the stock trades above that threshold. Up to 14,705,875 shares could be issued on conversion at the maximum rate.
Viridian said it would use the money to repay its Hercules Capital loan, fund market expansion studies in TED, advance its earlier pipeline and for general purposes. It repaid about $55.1 million to Hercules on May 27, ending a facility that charged at least 8.95% interest and had allowed borrowing of up to $300 million.
Context
The raise came right after Viridian reported on May 5 that elegrobart, its subcutaneous IGF-1R antibody, met its primary endpoint in REVEAL-2 in chronic TED, the second of two phase 3 trials. Veligrotug, its infused drug, had an FDA target date of June 30.
The company had $762.2 million in cash and investments at March 31. After the offerings, the debt payoff and second-quarter spending, it had $981.5 million at June 30.
What it means for investors
The financing swapped expensive, secured bank debt for cheap, unsecured convertible debt and added equity before the FDA decision. A 1.75% coupon is far below the 8.95% floor on the Hercules loan, so annual interest cost falls even with more debt outstanding.
The cost is dilution. The share sale added about 8.5 million shares, and the notes could add up to 14.7 million more if converted, against 113.2 million common shares outstanding at June 30. Raising before approval removed financing risk from the launch, but it meant selling stock before any sales data existed.
Viridian now says its cash and expected sales should fund it through profitability, so a further equity raise is not in its stated plan.
What to watch
The first coupon on the notes is due on November 15, 2026. Conversion windows can open in quarters after September 30, 2026, depending on the share price. The elegrobart BLA is planned for the first quarter of 2027.