Pharnext announces successful debt refinancing and new loan agreement
Pharnext announces successful debt refinancing and new loan agreement
- New fixed rate loan contract with Global Tech Opportunities 13, member of the Alpha Blue Ocean group, for a total amount of up to 12 million euros
- Pharnext will fully pay off the venture debt obligations originally signed in 2018 to IPF Partners
PARIS, France, June 8, 2022 at 8:30 am CET – Pharnext SA (FR0011191287 – ALPHA) (the “Company”), an advanced, late-stage clinical-stage biopharmaceutical company developing novel therapeutics for neurodegenerative diseases with high unmet medical need, announces today that the Company has entered into a fixed rate loan agreement with Global Tech Opportunities 13, a member of the Alpha Blue Ocean (“ABO”) Group for a total amount of up to EUR 12 million with an annual interest rate of 9.5% (the “Loan Agreement”).
In connection with this new financing, the Company will repay its outstanding €8 million in venture debt to IPF Partners, which has committed the Company to maintain €8 million in cash on its balance sheet at all times, pursuant to a commitment. The Loan Agreement is separate from the existing convertible debenture program, which consists of debentures convertible into new shares or exchangeable into existing shares (OCEANE), each with attached share subscription warrants (BSA), closed on June 7, 2021 with Global Tech Opportunities 13 amended on December 2021, January 2022 and 6 June 2022 as described below (the “2021 Convertible Bonds Scheme”).
This loan agreement will provide the company with additional flexibility in managing its balance sheet and financing needs.
Global Tech Opportunities 13’s EUR 12 million loan will be made available in five installments (EUR 3 million each, followed by two installments of EUR 2.5 million and two installments of EUR 2 million) starting in June 2022 and ending at the latest eight months after signing the loan agreement, whereby each installment following the first installment can be drawn one month after the immediately preceding installment payment, so that the entire commitment can be accessed early.
From the 4thth Month after drawing any installment and no later than 12 months after payment of such drawdown, such installment and its interest may be repaid in cash by the Company provided there is no default under the loan agreement. During the same period, Global Tech Opportunities 13 shall have the right, at its discretion, to subscribe for any new convertible bonds subscribed under the 2021 Convertible Bonds Program provided there is no default under the Loan Agreement. Set-off against specified, liquid and past due claims of Global Tech Opportunities against the Company equal to the principal amount of one installment of the Loan and its accrued interest as calculated on such relevant Set-Off Date. In the absence of an early repayment of any installment as noted above, all installments and their interest will be repaid on the anniversary of the relevant drawdown, in cash or by offsetting against convertible bonds issued pursuant to the Convertible Bonds Program 2021, at the Company’s sole discretion, provided no Event of Default has occurred under the Loan Agreement is.
The majority of the loan proceeds will be used to support operations and cash flow needs while Pharnext continues its pivotal Phase III study of PXT3003, the PREMIER study, in Charcot-Marie-Tooth disease type 1A (CMT1A ) advances. Pharnext recently announced that enrollment for the PREMIER study has been completed on schedule, with top-line data expected to be announced in Q4 2023.
Amendments to the 2021 Convertible Bond Program were agreed between the Company and Global Tech Opportunities 13 on June 6, 2022 to allow for repayment of installments through offsetting against future tranches of OCEANE with an attached BSA. This Amendment Agreement also provides for the payment of an additional commitment fee to Global Tech Opportunities 13 equal to 10% of the principal amount of each tranche of OCEANE with attached BSA, the subscription price of which is to be paid solely by offset against certain, liquid and past due accounts receivable, the Global Tech Opportunities 13 held against the company on the basis of the loan agreement at the time such a tranche was subscribed. This additional commitment fee will be paid by issuing additional OCEANE (without attached BSA) subscribed by Global Tech Opportunities 13 by offsetting against a claim against the Company. This amendment agreement also provides for the extension of the term of the outstanding and future OCEANE to 24 months (instead of 12 months) given the current liquidity of the shares.
In addition, certain terms of the original up to €81 million convertible bond program of June 2021, which existed prior to the amendment of December 22, 2021, are reintroduced, with €45 million still available to be drawn in 22 remaining tranches if the terms are met, after end of the loan agreement. Global Tech Opportunities 13 has also regained the right to exercise the seven investor calls originally contemplated in the 2021 convertible bond program.
Global Tech Opportunities currently owns 13 134.043.357 Shares of Pharnext (representing 27.36% of Pharnext’s share capital) and 1,500 OCEANE-BSA (EUR 10,000 nominal value each). Information on the number of OCEANE, BSA and shares issued under the 2021 convertible bond program is available on the company’s website at https://equityline.vox-aequitas.com/pharnext.
dr Pharnext Chief Executive Officer David Horn Solomon commented: “We are grateful to Alpha Blue Ocean for the continued support of Pharnext. This latest agreement will bridge cash requirements for our pivotal phase III clinical trial of PXT3003 in CMT1A, the PREMIER study, in which we just announced the completion of enrollment on schedule. Additionally, it will give the Company more flexibility and financial control as we continue discussions to secure funding, which may include equity financing and/or partnership arrangements. In addition, this new loan will remove the restrictive cash obligation and free the Company more resources for its PXT3003 study and general operating expenses.”
Added Pierre Vannineuse, Founder and Chief Investment Officer of Alpha Blue Ocean: “We are pleased to continue to support Pharnext as it advances its important drug candidate through development and for patients who may benefit from this new important medical approach. We have agreed to replace Pharnext’s legacy credit facility with more flexible credit to give the Company more leeway and comfort in completing its Phase III study. Alpha Blue Ocean is committed to advancing promising companies and this agreement with Pharnext supports our mission.”
Pharnext is an advanced clinical-stage biopharmaceutical company developing novel therapeutics for neurodegenerative diseases for which no curative and/or disease-modifying treatments are currently available. Pharnext has two leading products in clinical development. PXT3003 has completed an international Phase III study with positive top-line results in the treatment of Charcot-Marie-Tooth disease type 1A (‘CMT1A’) and benefits from orphan drug designation in Europe and the United States. An international pivotal phase III study is currently ongoing with PXT3003 in CMT1A, the PREMIER study. PXT864 has achieved encouraging Phase II results in Alzheimer’s disease and is being further developed through partnerships. Both of Pharnext’s lead assets stem from the Pleotherapy™ R&D approach. Pharnext cautions investors about the financial and other risk factors discussed in its financial reports. For more information, see www.pharnext.com.
Pharnext is listed on the Euronext Growth Stock Exchange in Paris (ISIN code: FR0011191287).
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