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ImmunoGen, Inc. (NASDAQ:IMGN) announced on Wednesday the $100 million aggregate principal amount pricing of its 4.50% convertible senior notes due by 2021 under a private placement. Pursuant to Rule 134A under the Securities Act of 1933, the senior notes will only be offered to qualified institutions. The initial buyers can also purchase up to $15 million of additional aggregate principal amount of the senior notes, guided by the same terms and conditions.

Transaction Details

The sale is expected to be completed by Monday and is subject to customary closing conditions. ImmunoGen is likely to generate up to $97 million in net proceeds. Should the initial buyers opt to purchase additional senior notes in full, ImmunoGen is looking at up to $111.20 million in net proceeds.

Moreover, the interests will be payable semi-annually every first days of January and July respectively each year at an annual rate of 4.50%. The payment scheme will fully commence starting January 1, 2017, with the notes maturing on July 1, 2021.

The holders can convert their respective purchased notes any time on or before the immediate day preceding the maturity date ends. As a result, they will receive their ImmunoGen stock at a rate of 238.7775 shares per $1,000 principal amount. This is equivalent to about $4 per share.

Purpose of Net Proceeds

The company seeks to use the proceeds from the sales to fund its working capital, corporate costs, operating expenses such as clinical trials, experimental therapy manufacturing processes, and other research and development (R&D) efforts, among others. However, ImmunoGen can use the generated proceeds for other purposes not mentioned.

Latest R&D Developments

Last month, ImmunoGen announced that the Phase 1 clinical trial assessing the efficacy and safety of mirvetuximab soravtansine in treating platinum-resistant, folate receptor alpha(FRα)-positive ovarian cancer showed a 44% objective response rate (ORR). Moreover, the results showed a median progression-free survival (PFS) of about seven months. The results of the Phase 1 trial are encouraging enough for ImmunoGen to look forward to a Phase 3 clinical study, which is expected to be launched by the fourth quarter. In line with this, ImmunoGen is working on its preparations to meet with the US Food and Drug Administration (FDA) by the third quarter.

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