Anacor Pharmaceuticals, Inc. Announces Proposed Offering of $70M Of Convertible Senior Notes Due 2021

Anacor Pharmaceuticals, Inc.

announced today that it intends to offer, subject to market and other considerations, $70,000,000 aggregate principal amount of Convertible Senior Notes due 2021 (the “Convertible Notes”) in a private placement under the Securities Act of 1933, as amended (the “Securities Act”). Anacor also intends to grant to the initial purchasers of the Convertible Notes a 30-day option to purchase up to an additional $7,000,000 aggregate principal amount of the Convertible Notes, solely to cover over-allotments, if any. In addition, certain funds affiliated with Venrock Associates (the “Venrock Funds”), one of Anacor's affiliates, have indicated an interest in purchasing $12.0 million aggregate principal amount of Convertible Senior Notes due 2021 (the “Venrock Notes”) in a concurrent private placement under the Securities Act. The Venrock Notes are expected to be sold at the same price, and constitute part of the same series, as the Convertible Notes. The Venrock Funds' indication of interest is not a binding agreement or commitment to purchase the Venrock Notes. Anacor intends to use a portion of the net proceeds of the offering and the sale of the Venrock Notes to repay in full its outstanding indebtedness under its loan and security agreement, and to use the remaining net proceeds for general corporate purposes. As of June 30, 2014, $30.0 million aggregate principal amount of loans was outstanding under the loan and security agreement. In connection with such repayment, Anacor will be subject to a prepayment fee equal to 2% of the aggregate principal amount of loans so repaid. The Convertible Notes will be general unsecured obligations of Anacor and interest will be paid semiannually. Subject to satisfaction of certain conditions and during certain periods, the Convertible Notes will be convertible at the option of holders into cash, shares of Anacor common stock or a combination thereof, at Anacor's election. The Convertible Notes will not be redeemable at Anacor's option prior to October 15, 2018. On or after October 15, 2018, the Convertible Notes will be redeemable at Anacor's option if the last reported sale price of Anacor's common stock for at least 20 trading days in any 30 trading day period exceeds 130% of the conversion price for the Convertible Notes. The interest rate, conversion rate and other terms of the Convertible Notes will be determined at the time of the pricing of the offering. The offering is being made to qualified institutional buyers pursuant to Rule 144A under the Securities Act. Neither the Convertible Notes nor any shares of Anacor's common stock issuable upon conversion of the Convertible Notes have been or are expected to be registered under the Securities Act or under any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall it constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.