Gossamer Bio, Inc. (NASDAQ: GOSS), a clinical-stage biopharmaceutical company focused on discovering, acquiring, developing and commercializing therapeutics in the disease areas of immunology, inflammation and oncology, today announced the pricing of its underwritten public offering of 9,433,963 shares of its common stock at a price to the public of $13.25 per share and the pricing of $200.0 million aggregate principal amount of its 5.00% convertible senior notes due 2027. The aggregate gross proceeds to Gossamer from the offerings, before deducting the underwriting discounts and commissions and other offering expenses, are expected to be approximately $325.0 million.

Gossamer also granted to the underwriters in the common stock offering a 30-day option to purchase up to an additional 1,415,094 shares of its common stock on the same terms and conditions and to the underwriters in the convertible senior notes offering a 13-day option to purchase up to an additional $30.0 million aggregate principal amount of the notes on the same terms and conditions solely to cover over-allotments.

The notes will be senior, unsecured obligations of Gossamer and will accrue interest at a rate of 5.00% per annum, payable semi-annually in arrears on June 1 and December 1 of each year. The notes will mature on June 1, 2027 unless earlier repurchased, redeemed or converted. Before March 1, 2027, noteholders will have the right to convert their notes only upon the occurrence of certain events. From and after March 1, 2027, noteholders may convert their notes at any time at their election until the close of business on the scheduled trading day immediately before the maturity date. Gossamer will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at Gossamer’s election. The initial conversion rate is 61.6095 shares of common stock per $1,000 principal amount of notes, which represents an initial conversion price of approximately $16.23 per share of common stock. The initial conversion price represents a premium of approximately 22.50% over the public offering price per share of common stock in the common stock offering. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events.

The notes will be redeemable, in whole or in part, for cash at Gossamer’s option at any time, and from time to time, on or after June 6, 2024 and on or before the 50th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of Gossamer’s common stock exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading date immediately preceding the date on which Gossamer provides notice of redemption, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date on which Gossamer provides the related notice of redemption.

If a “fundamental change” (as defined in the indenture for the notes) occurs, then noteholders may require Gossamer to repurchase their notes for cash. The repurchase price will be equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.

The offerings are expected to close on May 21, 2020, subject to customary closing conditions. The closing of each offering is not contingent on the closing of the other offering.

Gossamer intends to use the combined net proceeds from the offerings to fund research and development of its product candidates and development programs and for working capital and general corporate purposes.

BofA Securities and SVB Leerink are acting as joint book-running managers for the common stock offering. Evercore ISI, Barclays and Cantor are also acting as book-running managers for the common stock offering.

BofA Securities, SVB Leerink and Piper Sandler are acting as joint book-running managers for the convertible senior notes offering. SMBC is acting as co-manager for the convertible senior notes offering.