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Human Genome Sciences, Inc. (HGSI) Prices $430 Million Convertible Notes Offering


11/3/2011 7:17:01 AM

ROCKVILLE, Md.--(BUSINESS WIRE)-- Human Genome Sciences, Inc. (Nasdaq:HGSI - News) today announced the exercise in full of the underwriter’s option to purchase an additional $64.5 million principal amount of its Convertible Senior Notes due 2018 in connection with its public offering of the notes on November 2, 2011, for a total offering size of $494.5 million. Citigroup is acting as the underwriter, and will purchase the additional $64.5 million principal amount of notes from the company. The offering is expected to close on November 7, 2011, subject to customary closing conditions.

In connection with the exercise of the option to purchase additional notes, the company will enter into capped call transactions with certain counterparties. The company has previously entered into capped call transactions with the counterparties with respect to the shares of the company’s common stock that initially underlie the $430 million of the notes.

The capped call transactions are intended to reduce the potential dilution to the company’s common stock and/or offset any potential cash payments in excess of the principal amount of the converted notes, as the case may be, in connection with conversion of the notes, up to a stock price of approximately $18.45 per share, which is the initial cap on the counterparties’ share delivery and/or cash payment obligation under the capped call transactions. If the market value of the company’s common stock exceeds the cap specified in the capped call transactions, the settlement amount the company receives under such transactions will be capped, and the anti-dilutive and/or offsetting effect of the capped call transactions will be limited.

The notes will be issued pursuant to an effective shelf registration statement that was previously filed with the Securities and Exchange Commission and became effective immediately upon filing on October 29, 2009. The offering is being made by means of a prospectus supplement and related base prospectus. Copies of the prospectus supplement and related base prospectus for the offering may be obtained by contacting Citigroup Global Markets Inc. at Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, NY 11220, telephone number (800) 831-9146 or email at batprospectusdept@citi.com.

This press release is for informational purposes only and is not an offer to sell or a solicitation of an offer to sell any security of the company, nor will there be any sale of such security in any jurisdiction in which such offer, sale or solicitation would be unlawful. The offering may be made only be means of a prospectus supplement and related base prospectus.

About Human Genome Sciences

Human Genome Sciences exists to place new therapies into the hands of those battling serious disease.

HGS, Human Genome Sciences and BENLYSTA are trademarks of Human Genome Sciences, Inc.

Safe Harbor Statement

This announcement includes statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include those expectations regarding the offering of notes and our use of net proceeds. These forward-looking statements are based on our current intentions, beliefs and expectations regarding future events. We cannot guarantee that any forward-looking statement will be accurate. Investors should realize that if underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could differ materially from our expectations. Investors are, therefore, cautioned not to place undue reliance on any forward-looking statement. Any forward-looking statement speaks only as of the date of this announcement, and, except as required by law, we do not undertake to update any forward-looking statement to reflect new information, events or circumstances.

Some important factors that could cause our actual results to differ from our expectations in these forward-looking statements include: our lack of commercial experience and dependence on the sales growth of BENLYSTA; any failure to commercialize BENLYSTA successfully; the occurrence of adverse safety events with our products; changes in the availability of reimbursement for BENLYSTA; the inherent uncertainty of the timing, success of, and expense associated with, research, development, regulatory approval and commercialization of our pipeline products and new indications for existing products; substantial competition in our industry, including from branded and generic products; the highly regulated nature of our business; uncertainty regarding our intellectual property rights and those of others; the ability to manufacture at appropriate scale, and in compliance with regulatory requirements, to meet market demand for our products; our substantial indebtedness and lease obligations; our dependence on collaborations over which we may not always have full control; foreign exchange rate valuations and fluctuations; the impact of our acquisitions and strategic transactions; changes in the health care industry in the U.S. and other countries, including government laws and regulations relating to sales and promotion, reimbursement and pricing generally; significant litigation adverse to the company, including product liability and patent infringement claims; our ability to attract and retain key personnel; and increased scrutiny of the health care industry by government agencies and state attorneys general resulting in investigations and prosecutions.

The foregoing list sets forth many, but not all, of the factors that could cause actual results to differ from our expectations in any forward-looking statement. Investors should consider this cautionary statement, as well as the risk factors identified in our periodic reports filed with the SEC and the prospectus supplement and related base prospectus, when evaluating our forward-looking statements.

Contact:

Human Genome Sciences, Inc.Media:Susannah Budington, 301-545-1062Director, Corporate Public RelationsorJerry Parrott, 301-315-2777Vice President, Corporate CommunicationsorInvestor:Claudine Prowse, Ph.D., 301-315-1785Executive Director, Investor RelationsorPeter Vozzo, 301-251-6003Senior Director, Investor Relations



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