Santhera announces an improvement in its liquidity position
Ad hoc announcement pursuant to Art. 53LR
- Restructured youIming by ReveraGen mislandstone ppayments, reducing short-term cash requirements
- SecuredD up to CHF 40 mmillion of aadditional Ffunding
Pratteln, Switzerland, June 22022 – Santhera Pharmaceuticals (SIX:SANN) announcement this this renegotiated the timing of an upcoming milestone payment to partner ReveraGen, reducing the Company’s short-term financial obligations by CHF 20 million. Santhera has too enlarged his existing financing agreement with certain funds managed by Highbridge Capital ManagementLLC (“High Bridge”) who will provide up to CHF 40 million of Additional funding. Santhera waits the combination of these events at to deploy themselves its liquidity track in 2023 or until vamorolone is approved in the United States. which, subject to priority review be grantedis expected in Q1-2023.
Restructured milestone payments reduce short term need cash up to USD 20 million (40%)
An FDA approval of vamorolone would have triggered total milestone payments of $40 million to ReveraGen. An amendment to the agreement was negotiated with ReveraGen resulting in a reduction in the approval stage of $20 million in exchange for an increase in the sales stage of $20 million (due if and when the sales figure). annual business of vamorolone reaches 100 million USD). The approval milestone will be further reduced by monthly payments already made and due to ReveraGen for up to $4 million. Additionally, Idorsia is to receive a milestone payment of $10 million upon approval. In summary, the new agreement would lead to a reduction in the milestone due to the US approval of vamorolone from $50 million to $26 million, assuming payments totaling $4 million are made before approval.
Funding increased by Highbridge by until CHF 40 million adequate to meet liquidity needs until Q1-2023
Highbridge has agreed to augment its existing financing agreement with Santhera to provide up to 40 million Swiss francs in new senior secured exchangeable notes. Of this amount, approximately CHF 8.5 million will be used to refinance exchangeable bonds currently outstanding.
Such a facility allows for periodic drawdowns (based on meeting certain criteria, an assessment of liquidity and other sources of funds, and a sufficient number of shares for trading available at that time ) and can be exchanged by Highbridge for shares at a discount to VWAP (volume-weighted average price), subject to a floating floor. The maturity of these new exchangeable notes will be May 2024. The new exchangeable notes will pay fixed interest, which Santhera can pay in cash or in kind at a rate of between 12 and 16% per annum.
Andrew Smith, CFO of Santhera, commented, “We are pleased with the successful renegotiation of the agreement with ReveraGen which demonstrates its confidence in the commercial success of vamorolone. The additional financing provided by Highbridge is intended to enable pre-approval financing. We appreciate their continued support. Together, these measures significantly reduce our short-term funding needs, especially in times of market volatility.
In September 2021, Santhera secured blended equity and debt financing for a total amount of up to CHF 42 million (net), resolving the over-indebtedness through the repayment of the 2017/22 convertible bond and providing sufficient liquidity until in mid-2022. In addition to the increased funding from Highbridge announced today, additional capital will be required to support the commercialization of vamorolone, to pay for US approval milestones and to service Santhera’s outstanding debt.
The difficult market environment caused by the general slowdown in capital markets and geopolitical volatility made new capital raisings difficult. In response, the Company is considering various potential avenues to further strengthen liquidity, which may include royalty structured financings and licensing transactions in addition to or instead of a rights offering and/or transaction. PIPE (private investment in public capital).
In order to achieve profitability with vamorolone in DMD, which is currently expected, at the earliest, in H2-2024, Santhera estimates that the Company will need to obtain an additional CHF 40-50 million to fund its operations, including approval milestone payments in the United States. and its debt service. Following today’s announcements, this represents around 50% less than the previously announced funding requirement of around CHF 100 million.
Santhera Pharmaceuticals (SIX:SANN) is a Swiss specialty pharmaceutical company focused on the development and commercialization of innovative medicines for rare neuromuscular and pulmonary diseases with high unmet medical need. Santhera holds an exclusive license for all indications worldwide for vamorolone, a dissociative steroid with a novel mode of action, which has been studied in a pivotal study in patients with DMD as an alternative to standard corticosteroids. The company expects to complete the continued submission of its approval dossier for vamorolone to the U.S. FDA in June 2022. The clinical-stage pipeline also includes lonodelestat to treat cystic fibrosis (CF) and other lung diseases neutrophils. Santhera has licensed the rights to its first approved product, Raxone® (idebenone), outside of North America and France for the treatment of Leber’s Hereditary Optic Neuropathy (LHON) to the Chiesi Group. For more information, please visit www.santhera.com.
raxon® is a registered trademark of Santhera Pharmaceuticals.
Disclaimer / Forward-Looking Statements
This communication does not constitute an offer or an invitation to subscribe or purchase securities of Santhera Pharmaceuticals Holding AG. This publication may contain certain forward-looking statements regarding the Company and its business. These statements involve certain risks, uncertainties and other factors that could cause the actual results, financial condition, performance or achievements of the Company to be materially different from those expressed or implied by these statements. Readers should therefore not place undue reliance on such statements, particularly in connection with any contract or investment decision. The Company disclaims any obligation to update these forward-looking statements.
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