November 19, 2025

Which Biotechs Issue Convertible Bonds, When Do They Issue Them, and Who are The Leading Convertible Bond Banks?

For de-risked biotechs, convertible bonds (converts) can be a valuable addition to the company’s capital structure. By the time this is an option, biotechs have typically completed multiple follow-on offerings but are less likely to have a debt facility in place.

Converts are a financing hybrid – positioned between debt and equity – and typically come with materially lower interest rates than straight debt, owing to their equity component.

Generally speaking, converts are more popular among issuers in a low-interest-rate environment, but recent history shows they are utilized by companies throughout the interest rate cycle.

Investors like convertible bonds because they offer the potential for upside if the issuer’s stock price performs well and the bonds are converted into shares. If the stock doesn’t perform well, investors still benefit from the coupons each bond pays, along with repayment in full upon maturity (assuming no default).

In addition, there are investors that employ a strategy called “convertible arbitrage” where they hedge their long position in a company’s convertible bonds by shorting the underlying stock and adjusting their hedge as the stock moves. These are technical investors that do not take a view on stock price but trade the underlying volatility.

Why issue a convertible bond?

By issuing convertible debt, a biotech opens itself up to an entirely new class of investors. Funds that invest in convertible notes are usually specialists, so by issuing a convert, you increase the pool of capital from which you can fund your company’s development.

Once issued, traditional convert holders will listen to your quarterly conference calls and request one-on-one investor meetings – much like equity investors.

How popular are convertible bonds for biotechs?

According to FactSet, there were 54 newly issued convertible bonds by U.S.-based biotech/pharma companies in the period 2020-2024, collectively raising ~$16.3 billion.

Source: FactSet

• The largest single issue of convertible notes during the period was Sarepta’s $1.15 billion, 1.125%, five-year notes due 2027 (issued in September 2022).
• Of the 54 converts issued in this period, 44 raised more than $100 million with the mean amvount raised being ~$300 million.  
• On average, each convert had a mean duration of 5.7 years and a mode of 5 years.  
• The average (mean) coupon for converts in this period was 3.3%.

What kind of biotechs issue convertible notes?

As mentioned previously, the convertible market opens to biotechs when their investment thesis (business model) has been de-risked. This can mean different things for different companies.

• At a minimum, it often means the company has at least one positive Phase 3 dataset in hand, with the proceeds from the convertible helping fund the company through approval and/or commercialization.
• More commonly, it means a biotech is further down the path of commercialization.

For illustrative purposes, let’s go through each of the five convertible notes that were issued in 2024 and characterize the biotech/pharma companies that issued them.

Here are the five notes issued in 2024.

Biotech/Pharma Issuer	$M	Coupon (%)	Issue Date	Maturity Date	Bond Tenure
Mirum Pharmaceuticals, Inc.	200	4	04/30/2024	5/01/2029	~5 years
Karyopharm Therapeutics, Inc.	116	6	05/13/2024	05/13/2029	~5 years
Pacira Biosciences, Inc.	288	2.125	05/14/2024	05/15/2029	~5 years
ANI Pharmaceuticals, Inc.	316	2.25	08/13/2024	09/01/2029	~5 years
Esperion Therapeutics, Inc.	100	5.75	12/17/2024	06/15/2030	~5.5 years

Source: FactSet

Now let’s look at the development stage of each biotech when they issued their convert:

Biotech/Pharma Issuer	Mkt Cap at Time of Issuance	Development Stage
Mirum Pharmaceuticals, Inc.	$1,183M	FDA approved drugs included LIVMARLI, CHOLBAM and CHENODAL. FY’24 revenue was $336.4 million
Karyopharm Therapeutics, Inc.	$132M	FDA approved drugs included XPOVIO. FY’24 revenue guidance $140-160 million
Pacira Biosciences, Inc.	$1,435M	FDA approved drugs included EXPAREL and ZILRETTA. FY’24 revenue guidance: $680-705 million
ANI Pharmaceuticals, Inc.	$1,240M	FDA approved drugs included Cortrophin Gel. FY’24 revenue of $198 million
Esperion Therapeutics, Inc.	$485M	FDA approved drugs included NEXLETOL and NEXLIZET. FY’24 revenue of $332 million

Source: FactSet, New Street Investor Relations

• From the above table, it can be seen that all five of 2024’s convert issuers were generating annual revenue vastly exceeding $100 million a year, each based on one or more FDA-approved drugs.
• Pacira Biosciences, which had the largest market capitalization at $1.4 billion at the time it issued its 2024 convert, paid the lowest coupon at 2.125%.
• Karyopharm Therapeutics, which had the lowest market capitalization at $132 million at the time of issuance, paid the highest coupon at 6%.
• All 2024 biotech converts had maturities of between 5 and 5.5 years.

Who are the leading banks for biotech/pharma converts?

Before proceeding, note that only converts issued under Regulation S publicly disclose the banking syndicate involved in the transaction. Those that constitute 144A offerings – which allow qualified institutional buyers to participate in the offering without the issuer having to register the notes with the SEC – do not.

Here, then, are the leading banks for converts during 2020-2024 (where publicly disclosed).

Top lead managers/bookrunners for biotech/pharma converts 2020-24

Bank	Number of Biotech/Pharma Convertible Offerings Bank Was Lead Manager/Bookrunner
J.P. Morgan	9
Jefferies	7
Goldman Sachs	4
Bank of America	4
Morgan Stanley	2
Cantor Fitzgerald	1
Credit Suisse	1

Source: SEC filings.

From the table above, you can see that J.P. Morgan and Jefferies were the two most active banks in biotech/pharma convertibles, coming in first and second place, respectively, with Goldman Sachs and Bank of America in joint third place.

How do converts work?

• Coupon: Paid either semi-annually or annually (depending on terms) in arrears, with accrued interest calculated using a 360-day year (which is standard for bonds).
• Maturity: Date at which the bond is repaid at par (unless otherwise stated), unless a conversion event has taken place. Par means 100% of the original principal, often represented as 100% of each nominal $1,000 of bonds.
• Conversion: Subject to the specific terms of the issue, but let’s look at the terms of Esperion’s 5.75% 2030 notes as a representative example:

“Holders will have the right to convert their notes only upon the occurrence of certain events or after March 15, 2030. Esperion will have the right to elect to 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.”

“The initial conversion rate is 326.7974 shares of common stock per $1,000 principal amount of notes, which represents an initial conversion price of approximately $3.06 per share of common stock.”

Note that convert holders only have the right to convert (at their discretion) beginning three months before the maturity date. Otherwise, certain conditions have to be met before they can convert. Also note that Esperion’s equity closed at $2.46 on the date the bond was issued (12/17/2024), meaning that the conversion rate represented a premium of ~25% over the prevailing stock price.

• Change of control provision: Depending on the terms of the note, convertible bondholders sometimes have the option of converting their bonds into equity or being redeemed at par (unless otherwise stated).

Again, using Esperion’s 5.75% 2030 notes as a representative example:

“In addition, if Esperion undergoes a “fundamental change” (as defined in the indenture governing the New Notes), subject to certain conditions, holders may require Esperion to repurchase for cash all or part of their … Notes in principal amounts of $1,000 or an integral multiple thereof. 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.”

Conclusion:

Convertible notes are an important part of late-stage biotech’s financial armamentarium and are an important way to tap a new source of capital and investors. They are typically only available to de-risked biotechs – those with approved drugs and established revenue.

Convert investors typically gain the right to upside in a biotech’s stock price, while being paid a stable coupon and retaining the option to be paid back in full.

Appendix: Chronological list of convertible bonds issued by biotechs (2020-2024)

Issuer	Coupon	Issue Date	Maturity Date	USD Issued (m)
Collegium Pharmaceutical, Inc.	2.625	02/13/2020	02/15/2026	125
Revance Therapeutics, Inc.	1.75	02/14/2020	02/15/2027	288
Rocket Pharmaceuticals, Inc.	6.25	02/20/2020	08/01/2022	39
Inovio Pharmaceuticals, Inc.	6.5	03/04/2020	03/01/2024	70
BridgeBio Pharma, Inc.	2.5	03/09/2020	03/15/2027	475
Coherus BioSciences, Inc.	1.5	04/17/2020	04/15/2026	200
Apellis Pharmaceuticals, Inc.	3.5	05/12/2020	09/15/2026	300
BioMarin Pharmaceutical Inc.	1.25	05/14/2020	05/15/2027	550
Gossamer Bio, Inc.	5	05/21/2020	06/01/2027	200
Tricida, Inc.	3.5	05/22/2020	05/15/2027	200
Aegerion Pharmaceuticals, Inc.	5	06/15/2020	04/01/2025	125
Xeris Pharmaceuticals, Inc.	5	06/30/2020	07/15/2025	75
Pacira Biosciences, Inc.	0.75	07/10/2020	08/01/2025	403
VJGJ, Inc.	9.5	07/20/2020	03/30/2023	14
Ironwood Pharmaceuticals, Inc.	0.75	08/14/2020	06/15/2024	175
Ironwood Pharmaceuticals, Inc.	1.5	08/14/2020	06/15/2026	175
Omeros Corporation	5.25	08/14/2020	02/15/2026	210
VJGJ, Inc.	0	09/22/2020	05/01/2023	28
Clovis Oncology, Inc.	4.5	09/22/2020	08/01/2024	250
Lannett Company, Inc.	4.5	10/02/2020	10/01/2026	86
Verastem, Inc.	5	11/13/2020	11/01/2048	150
Esperion Therapeutics, Inc.	4	11/16/2020	11/15/2025	250
Clovis Oncology, Inc.	4.5	11/17/2020	08/01/2024	50
Acorda Therapeutics, Inc.	6	12/29/2020	12/01/2024	207
BridgeBio Pharma, Inc.	2.25	01/28/2021	02/01/2029	718
Halozyme Therapeutics, Inc.	1.25	02/19/2021	12/01/2024	460
Halozyme Therapeutics, Inc.	0.25	03/01/2021	03/01/2027	805
MannKind Corporation	2.5	03/04/2021	03/01/2026	200
Ionis Pharmaceuticals, Inc.	0	04/12/2021	04/01/2026	633
Dynavax Technologies Corp	2.5	05/13/2021	05/15/2026	200
Insmed Incorporated	0.75	05/13/2021	06/01/2028	500
Protalix Biotherapeutics, Inc.	7.5	08/24/2021	09/01/2024	29
Global Blood Therapeutics, Inc.	1.875	12/17/2021	12/15/2028	345
Innoviva, Inc.	2.125	03/07/2022	03/15/2028	225
Travere Therapeutics, Inc.	2.25	03/11/2022	03/01/2029	275
PTC Therapeutics, Inc.	1.5	04/11/2022	09/15/2026	288
Cytokinetics, Incorporated	3.5	07/06/2022	07/01/2027	540
Cerevel Therapeutics Holdings	2.5	08/16/2022	08/15/2027	345
Halozyme Therapeutics, Inc.	1	08/18/2022	08/15/2028	720
Assertio Holdings, Inc.	6.5	08/25/2022	09/01/2027	70
Alnylam Pharmaceuticals, Inc.	1	09/15/2022	09/15/2027	900
Sarepta Therapeutics, Inc.	1.25	09/16/2022	09/15/2027	1150
Novavax, Inc.	5	12/20/2022	12/15/2027	150
Collegium Pharmaceutical, Inc.	2.875	02/10/2023	02/15/2029	242
Mirum Pharmaceuticals, Inc.	4	04/17/2023	05/01/2029	316
Ionis Pharmaceuticals, Inc.	1.75	06/12/2023	06/15/2028	575
Amphastar Pharmaceuticals, Inc.	2	09/15/2023	03/15/2029	345
Xeris Biopharma Holdings, Inc.	8	09/29/2023	07/15/2028	34
Repligen Corporation	1	12/14/2023	12/15/2028	600
Mirum Pharmaceuticals, Inc.	4	04/30/2024	05/01/2029	200
Karyopharm Therapeutics Inc	6	05/13/2024	05/13/2029	116
Pacira Biosciences, Inc.	2.125	05/14/2024	05/15/2029	288
ANI Pharmaceuticals, Inc.	2.25	08/13/2024	09/01/2029	316
Esperion Therapeutics, Inc.	5.75	12/17/2024	06/15/2030	100

Source: FactSet