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First Eagle Investment Management Funds This Pharmaceutical Company

In a separate 13D filing, First Eagle Investment Management LLC, currently headed by President and Chief Executive Officer Mehdi Mahmud, reported owning 4.43 million shares of Aradigm Corporation (NASDAQ:ARDM), which include 575,815 shares of common stock issuable upon the conversion of the 9.0% Senior Convertible Notes due 2021 recently acquired by First Eagle. This represents an increase from the stake of 3.85 million shares disclosed in the firm’s 13F filing for the December quarter, so the aforementioned 13D was amended to include that First Eagle acquired $3 million of Convertible Notes that pay an interest of 9% per annum, payable semi-annually in arrears on May 1 and November 1 each year. The initial conversion price is $5.21 per share of common stock, which equates to an initial conversion rate of nearly 192 shares of common stock per $1,000 aggregate principal amount of Notes.

Aradigm Corporation (NASDAQ:ARDM) raised approximately $20.7 million in net proceeds from the private placement of $23 million aggregate principal amount of senior convertible notes due 2021, which will be used to fund the clinical development and regulatory submission for licensure of the company’s investigational product Pulmaquin inhaled ciprofloxacin. The emerging specialty pharmaceutical company that focuses on the development and commercialization of products for the treatment of severe respiratory diseases has seen its market value gain 20% since the beginning of 2016. The company’s lead development candidates are formulations of the potent antibiotic ciprofloxacin (Pulmaquin and Lipoquin), which are delivered by inhalation for the management of infections related to severe respiratory diseases such as cystic fibrosis (CF) and non-cystic fibrosis bronchiectasis (BE). Steven Cohen’s Point72 Asset Management LP owned 320,585 shares of Aradigm Corporation (NASDAQ:ARDM) at the end of December.