Ocugen, Inc. announced a private placement of convertible senior notes that has coincided with a steep drop in its share price. The company said it priced $115 million of 6.75% Convertible Senior Notes due 2034 at 90% of the principal amount, and the news was followed by a roughly 17% decline in the stock on Tuesday.
The securities were sold to qualified institutional buyers. Ocugen also granted the initial purchaser a 13-day option to buy up to an additional $15 million of notes. The offering is expected to close on May 7, 2026, and after fees and expenses is anticipated to produce approximately $99.5 million in net proceeds.
Ocugen indicated it will allocate about $32.7 million of the proceeds to fully repay an outstanding loan owed to affiliates of Avenue Capital Group, including accrued interest and any prepayment fees. The company said the balance of the funds will be directed toward general corporate purposes.
The notes carry an annual interest rate of 6.75%, with interest payable semi-annually on May 15 and November 15, beginning November 15, 2026. The instruments mature on May 15, 2034. The initial conversion rate has been set at 372.7866 shares per $1,000 principal amount, which equates to a conversion price of approximately $2.68 per share. That conversion price represents a 45% premium to Ocugen's $1.85 closing price on May 4, 2026.
Terms of the notes include a non-redemption period during which Ocugen may not redeem the notes prior to May 15, 2029. Additionally, holders will have the right to require Ocugen to repurchase the notes on May 15, 2032, at 100% of the principal amount plus accrued interest.
In separate financial results, Ocugen reported first-quarter earnings per share of ($0.06), missing the analyst consensus of ($0.05) by $0.01. Revenue for the quarter was $1.53 million, which exceeded the consensus estimate of $501.4 thousand.
The planned note offering, its terms, and the mixed quarterly results together contributed to the market reaction. The company framed the financing as a combination of refinancing an existing affiliate loan and advancing general corporate liquidity, while investors reacted to both the discounted pricing of the notes and the near-term earnings miss.
Contextual note - The article presents the terms and expected uses of proceeds as disclosed by the company and the reported quarter results. It does not provide projections or additional commentary beyond those disclosures.