Pharnext Announces Successful Debt Refinancing and New Loan Agreement
New fixed rate loan agreement with Global Tech Opportunities 13, member of the Alpha Blue Ocean group, for a total amount of up to 12 million euros
Pharnext agrees to pay in full the risky debt obligations to IPF Partners originally signed in 2018
PARIS, FRANCE / ACCESSWIRE / June 8, 2022 / Pharnext SA (FR0011191287 – ALPHA) (the “Company”), an advanced late-stage biopharmaceutical company developing novel therapeutics for neurodegenerative diseases with high unmet medical need, announces today that the Company has entered into a loan agreement fixed rate with Global Tech Opportunities 13, a member of the Alpha Blue Ocean (“ABO”) group, for an aggregate amount of up to €12 million with an annual interest rate of 9.5% (the “Loan Agreement”) ).
As part of this new financing, the Company will repay its outstanding venture capital debt of 8 million euros to IPF Partners, which required the Company, under a covenant, to retain at all times 8 million euros of cash on its balance sheet. The Loan Agreement is separate from the existing convertible bond program consisting of bonds convertible into new shares or exchangeable for existing shares (OCEANE), each accompanied by stock warrants (BSA), entered into with Global Tech Opportunities 13 on June 7, 2021, as amended in December 2021, January 2022 and June 6, 2022, as detailed below (the “2021 Convertible Bond Program”).
This loan agreement will provide the company with increased flexibility to manage its balance sheet and financing needs.
The €12 million loan from Global Tech Opportunities 13 will be made available in five tranches (respectively €3 million, followed by two tranches of €2.5 million and two tranches of €2 million). euros) from June 2022 and ending no later than eight months after the date of signature of the Loan Agreement, each installment following the first installment being able to be drawn one month after payment of the immediately preceding installment, so that the full commitment can be drawn earlier.
From the 4th month following the drawdown of any installment and at the latest 12 months after the payment of this drawdown, this installment and its interest may be reimbursed in cash by the Company provided that no event of default occurs under of the Loan Agreement. During the same period, subject to no event of default occurring under the Loan Agreement, Global Tech Opportunities 13 shall be entitled, at its sole discretion, to subscribe for any new convertible bonds drawn under the ‘Convertible Bonds 2021 by Settlement’ on certain liquid and payable claims held by Global Tech Opportunities against the Company equal to the principal amount of any installment of the loan and accrued interest thereon, as calculated on such relevant clearing date. In the absence of early redemption of any installment referred to above, any installment and its interest will be reimbursed on the anniversary date of the drawing concerned, at the option of the Company in cash or by offsetting with convertible bonds issued under the Program of 2021 Convertible Bonds, provided no event of default occurs under the Loan Agreement.
Proceeds from the loan will primarily be used to support operations and cash flow needs as Pharnext progresses its pivotal Phase III study of PXT3003, the PREMIER trial, in Charcot-Marie-Tooth disease of type 1A (CMT1A). Pharnext recently announced that enrollment for the PREMIER trial has completed on schedule and early data is 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 in order to allow the repayment of maturities by offsetting with future OCEANE tranches accompanied by BSA. This amendment also provides for the payment of an additional commitment fee to Global Tech Opportunities 13, equal to 10% of the principal amount of any OCEANE tranche accompanied by BSAs, the subscription price of which will be paid exclusively by offsetting with , debt liquid and payable held by Global Tech Opportunities 13 against the Company resulting from the Loan Agreement at the time of subscription of this tranche. This additional commitment fee will be paid through the issuance of additional OCEANEs (without BSAs attached) subscribed by Global Tech Opportunities 13 by offsetting against a claim held on the Company. This amendment also provides for the extension of the maturity of outstanding and future OCEANE bonds to 24 months (instead of 12 months) given the current liquidity of the shares.
In addition, some of the terms of the original June 2021 convertible bond program up to €81 million existing prior to the December 22, 2021 amendment are reinstated, with €45 million still available to be drawn in 22 remaining tranches if the conditions are met, after the end of the loan contract. Global Tech Opportunities 13 also regained the right to exercise the seven investor calls originally planned in the 2021 convertible bond program.
Global Tech Opportunities 13 currently holds 134,043,357 Pharnext shares (corresponding to 27.36% of Pharnext’s share capital), and 1,500 OCEANE-BSAs (with a nominal value of EUR 10,000 each). Information on the number of OCEANEs, BSAs and shares issued under the 2021 Convertible Bond Program is available on the Company’s website at https://equityline.vox-aequitas.com/pharnext.
Dr. David Horn Solomon, CEO of Pharnext, said: “We are grateful to Alpha Blue Ocean for their continued support of Pharnext. This latest agreement will make it possible to meet the cash requirements of our pivotal Phase III clinical study of PXT3003 in CMT1A, the PREMIER trial, for which we have just announced the finalization of registrations on schedule. Additionally, it will give the Company greater flexibility and financial control as we pursue discussions to secure financing that may include equity financings and/or partnership agreements. Additionally, this new loan will remove the cash covenant, freeing up more resources for the Company for its PXT3003 study and general operating expenses.”
Pierre Vannineuse, Founder and Chief Investment Officer of Alpha Blue Ocean, added: “We are delighted to be able to continue our support of Pharnext as it advances its important drug candidate in development and to the patients who could benefit from this new important medical approach. We have agreed to replace Pharnext’s old debt facility with more flexible debt to give it more flexibility and comfort to complete 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 therapies for neurodegenerative diseases that currently lack cures and/or disease-modifying therapies. Pharnext has two flagship products in clinical development. PXT3003 has completed an international phase III trial with positive initial results for the treatment of Charcot-Marie-Tooth disease type 1A (“CMT1A”) and has orphan drug status in Europe and the United States. A pivotal international Phase III study of PXT3003 in CMT1A, the PREMIER trial, is currently underway. PXT864 has generated encouraging phase II results in Alzheimer’s disease and will be advanced through partnerships. Pharnext’s two flagship active ingredients come from the Pleotherapy™ R&D approach. Pharnext draws the attention of investors to the financial and other risk factors detailed in its financial reports. More information can be found at www.pharnext.com.
Pharnext is listed on the Euronext Growth stock exchange in Paris (ISIN code: FR0011191287).
Dr. David Horn Salomon
Chief executive officer
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THE SOURCE: Pharnext
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