Halozyme Therapeutics Closes $1.5B Convertible Senior Notes Offering Due 2033

Executive Summary

On September 22, 2026, Halozyme Therapeutics, Inc. (NASDAQ: HALO) closed its offering of $1,500.0 million aggregate principal amount of 1.50% Convertible Senior Notes due 2033. This total includes the full exercise of the initial purchasers' option to acquire an additional $200.0 million of notes. The transaction provides Halozyme with approximately $1,471.1 million in net proceeds after discounts, commissions, and estimated expenses.

Key Terms of the 2033 Notes

• Principal Amount: $1,500,000,000
• Interest Rate: 1.50% per annum, payable semi-annually in arrears on April 1 and October 1, starting April 1, 2027
• Maturity Date: April 1, 2033 (unless earlier redeemed, repurchased, or converted)
• Initial Conversion Rate: 7.1509 shares of common stock per $1,000 principal amount, representing an initial conversion price of approximately $139.84 per share
• Maximum Potential Shares: A maximum of 13,676,100 common shares may initially be issuable upon conversion based on the maximum conversion rate of 9.1174 shares per $1,000 principal
• Redemption Features: Optional provisional redemption available on or after October 7, 2030, subject to stock price conditions (>130% of conversion price for 20 of 30 trading days), plus cleanup redemption rights if less than $100.0 million remains outstanding

Use of Proceeds & Capital Allocation

1. Capped Call Transactions: Halozyme deployed approximately $187.5 million of the net proceeds into capped call transactions with initial purchasers and financial institutions. The capped calls feature an initial cap price of $208.39 (a 90.0% premium over the September 17, 2026 closing price), substantially mitigating potential equity dilution up to the cap level.
2. Deleveraging / Refinancing: Halozyme allocated approximately $652.5 million to repurchase portions of its existing convertible debt:
   • Repurchase of ~$151.7 million principal of 0.25% convertible senior notes due 2027 for ~$217.0 million.
   • Repurchase of ~$220.0 million principal of 1.00% convertible senior notes due 2028 for ~$435.5 million.
3. General Corporate Purposes: The remaining ~$631.1 million in net proceeds will support working capital, strategic transactions, future debt service, and potential acquisitions.

Market and Dilution Implications

• Dilution Protection: The capped call structure raises the effective dilution barrier to $208.39, offering strong insulation against dilution for common shareholders below that threshold.
• Maturity Extension: By refinancing 2027 and 2028 maturities into 2033 debt, Halozyme pushes out its debt maturity profile while securing low fixed coupon financing (1.50%) despite elevated broader interest rate environments.
• Trading Considerations: Note repurchase hedging and capped call counterparty hedging in the secondary market may have created, and could continue to create, transient market volume and volatility in HALO common stock.