On November 14, 2017, the Company issued $570.0 million senior notes due on November 15, 2024 (the “2024 Notes”). The 2024 Notes were issued at face value and bear interest at the rate of 1.50% per annum, payable semi-annually in cash on each May 15 and November 15, commencing on May 15, 2018. The 2024 Notes contain customary covenants and events of default, occurrence of which permits the certain holders to accelerate all outstanding obligations, including principal and interest.

Upon conversion, the Company may pay cash, shares of its common stock or a combination of cash and stock, as determined by the Company in its discretion. The 2024 Notes may be convertible into 7,763,552 shares of the Company’s common stock under certain circumstances prior to maturity at a conversion rate of 13.621 shares per $1,000 principal amount of the 2024 Notes, which represents a conversion price of $73.42 per share, subject to adjustment under certain conditions.

The Company allocated the proceeds received from issuance of the 2024 Notes between the liability component and the embedded conversion option, or equity component. The liability component was determined by measuring the fair value of similar notes that do not include the embedded conversion option. The Company allocated $161.1 million to the equity component, which was determined by deducting the fair value of the liability component from the par value of the 2024 Notes. The equity component, net of allocated offering costs of $4.2 million, was recorded as an increase additional paid-in capital. The equity component, plus $10.6 million of offering costs allocated to the liability component, represent the total debt discount on the 2024 Notes at issuance. The debt discount is amortized under the effective interest method and recorded as additional interest expense over the life of the 2024 Notes. The effective interest rate on the liability component of the 2024 Notes for the year ended December 31, 2020, 2019 and 2018 was 6.9%.

Upon the occurrence of a “fundamental change”, which includes (1) change in beneficial ownership of the Company where any person/group possesses more than 50% of the voting power of the Company, (2) consolidation or merger of the Company, (3) shareholder approval of a liquidation plan or (4) the Company is delisted from NYSE or NASDAQ, the holders may require the Company to repurchase all or a portion of the 2024 Notes for cash at 100% of the principal amount of the 2024 Notes being purchased, plus any accrued and unpaid interest. Additionally, upon the occurrence of a “make-whole fundamental change” prior to the maturity date, the Company shall adjust the conversion rate on a sliding scale basis detailed in the agreement

To minimize the impact of potential dilution upon conversion of the 2024 Notes, the Company separately entered into capped call transactions with certain counterparties. The capped calls have a strike price of $73.42 and a cap price of $104.88 and are exercisable when and if the 2024 Notes are converted. If, upon conversion of the 2024 Notes, the price of the Company’s common stock is between the strike price and the cap price of the capped calls, the counterparties will deliver shares of the Company’s common stock and/or cash with an aggregate value equal to the difference between the price of the Company’s common stock at the conversion date and the strike price, multiplied by the number of shares of the Company’s common stock related to the capped calls being exercised. The Company paid $50.9 million for these capped calls transactions, which was recorded as additional paid-in capital.

On December 13, 2019, the Company entered into a loan agreement (the “Credit Agreement”) which provides a term loan (“December 2019 Term Loan”) of $500.0 million with Biopharma Credit PLC and Biopharma Credit Investments V (Master) LP (collectively, the “Lenders”). The December 2019 Term Loan has two tranches: A and B, each of which had an initial loan amount of $250.0 million, prior to the Amendment. On December 20, 2019, the Company drew down tranche A of the December 2019 Term Loan and had the option to draw down tranche B of the loan no later than December 31, 2020, subject to certain conditions. On September 24, 2020, the Company entered into a first amendment to Credit Agreement (the “Amendment”). The Amendment increased the aggregate principal amount of tranche B of the December 2019 Term Loan from $250.0 million to $300.0 million and revised certain fees. On November 2, 2020, the Company drew down tranche B of the December 2019 Term Loan. Tranche A and B of the December 2019 Term Loan matures on December 20, 2023 and December 31, 2024, respectively, when the principal amount of the loan will become due.

Borrowings under the Credit Agreement bear interest at a rate per annum equal to 8.5%, which shall be payable quarterly in arrears. The Company is also required to pay the Lenders (1) a fee of 1.75% of the amounts drawn under tranche A of the December 2019 Term Loan due on the date tranche A is drawn, which was paid in December 2019, (2) a fee of 2.95% of the amounts drawn under tranche B of the December 2019 Term Loan due on the date tranche B is drawn, which was paid in November 2020, (3) a fee of 2.00% of principal amount on the December 2019 Term Loan maturity dates or prepayment amount on each prepayment date and (4) certain out-of-pocket expenses incurred by the Lenders.

The Company may voluntarily prepay, in whole or in part, the outstanding balance under the December 2019 Term Loan at any time after the tranche A closing date. Upon occurrence of a change in control, the Company is required to repay any amounts outstanding under the December 2019 Term Loan. In the event of a permitted prepayment, the Company would be obligated to make the following premium payments: (1) an amount equal to the sum of all interest that would have been accrued and payable from the prepayment date through December 20, 2021 (“Makewhole Amount”), and (2) an amount equal to 1.0% to 2.0% of the prepayment amount depending on the date of the prepayment (“Prepayment Premium”).

The Credit Agreement contains customary affirmative and negative covenants as well as events of default, the occurrence of which would permit the Lenders to accelerate the payment of all outstanding obligations, including the payment of the Makewhole Amount and Prepayment Premium.

Upon draw-down of tranche A, the Company received net proceeds of $244.9 million for tranche A, net of a debt discount of $9.4 million relating to fees payable to the Lenders, $5.0 million of which is expected to be paid on December 20, 2023, and debt issuance costs of $0.7 million, both of which are being treated as a reduction to the carrying value of tranche A of the December 2019 Term Loan and amortized as interest expense over the term of the loan based on an effective interest method.

Upon draw-down of tranche B, the company received net proceeds of $291.1 million, net of a debt discount of $14.9 million relating to fees payable to the Lenders, $6.0 million of which is expected to be paid on December 31, 2024, and debt issuance costs of

less than $0.1 million, both of which are being treated as a reduction to the carrying value of tranche B of the December 2019 Term Loan and amortized as interest expense over the term of the loan based on an effective interest method.

As of December 31, 2020, the Company recorded approximately $992.5 million as long-term debt on the its consolidated balance sheets. For the years ended December 31, 2020, 2019 and 2018, the Company recorded $59.9 million, $30.7 million and $33.7 million of interest expense, respectively.

The following table summarizes the Company’s debt facilities for the periods indicated:

	As of December 31,
	2020			2019
	(in thousands)
Principal amount of the 2024 Notes	$	569,993		$	570,000
Unamortized discount - equity component		(98,721	)		(120,182	)
Unamortized discount - debt issuance costs		(6,510	)		(7,922	)
Net carrying value of 2024 Notes		464,762			441,896
Principal amount of the 2019 Term Loan		550,000			250,000
Unamortized discounts		(22,269	)		(9,996	)
Net carrying value of 2019 Term Loan		527,731			240,004
Total carrying value of debt facilities	$	992,493		$	681,900

Fair value of 2024 Notes	$	1,394,249		$	1,141,288
Fair value of 2019 Term Loan		550,000			250,000
Total fair value of debt facilities	$	1,944,249		$	1,391,288

The fair value of the 2024 Notes is based on open market trades and is classified as level 1 in the fair value hierarchy. The fair value of the December 2019 Term Loan, approximating its face value, is classified as level 2 in the fair value hierarchy as it is based on market observable inputs.

The following table summarizes the total gross payments due under the Company’s debt arrangements:

	As of December 31, 2020 (in thousands)
2021	$	—
2022		—
2023		250,000
2024		869,993
2025		—
Thereafter		—
Total payments	$	1,119,993