Santhera Pharmaceuticals Secures Significant Financing for Growth and Debt Repayment
June 25, 2024, 3:35 am
Santhera Pharmaceuticals, a Swiss specialty pharmaceutical company, has recently announced the successful securing of up to CHF 69 million in financing to drive growth, repay debt, and extend its cash runway through to the first half of 2026. This funding includes a strategic royalty monetization deal with R-Bridge, an affiliate of CBC Group, and a new CHF 35 million term loan from Highbridge Capital Management, LLC.
The financing arrangements are designed to support the advancement of AGAMREE® (vamorolone) in Europe, as well as further development initiatives in the pipeline. Andrew Smith, the Chief Financial Officer of Santhera, expressed his satisfaction with the financing, emphasizing its non-dilutive nature and its alignment with the company's growth expectations and debt obligations.
As part of the deal, Santhera is monetizing 75% of its future royalty income streams from licensing agreements for AGAMREE with Catalyst Pharmaceuticals, Inc. for North America and Sperogenix Therapeutics Ltd. for China. R-Bridge will provide upfront payment of USD 30 million upon closing of the transaction, with additional milestone payments potentially totaling up to USD 38 million. The agreement includes caps on payments to R-Bridge, with the royalty payments reverting back to Santhera once certain thresholds are met.
In addition to the royalty monetization deal, Santhera has secured a CHF 35 million term loan from Highbridge, which will provide the company with a single draw of funds. The loan has a four-year maturity with amortization of 15% per year, starting after 24 months, and carries a cash interest rate of 3-month SARON (with a floor of 2%) plus 9.75% per year. The agreement also includes options for partial interest payments in kind and early loan redemption, subject to a premium.
Furthermore, as part of the transaction with Highbridge, the maturity of private senior unsecured convertible bonds with a strike price of CHF 10 and due in August 2024 will be extended by 12 months. Additionally, private senior unsecured convertible bonds with a strike price of CHF 5 and due in August 2024 will be converted. Highbridge will also exercise warrants it holds and receive 236,540 warrants, each exercisable for one Santhera share at an exercise price of CHF 11.0975 over a five-year period.
Santhera plans to use the net proceeds from these financings primarily to repay the outstanding amount of CHF 13.5 million of the public senior unsecured convertible bond due in 2024, as well as for product commercialization and general corporate purposes, with the aim of extending its cash runway to anticipated cash flow break-even.
Overall, these financing arrangements reflect Santhera's commitment to driving growth, repaying debt, and achieving financial stability as it continues to advance its innovative medicines for rare neuromuscular and pulmonary diseases.
The financing arrangements are designed to support the advancement of AGAMREE® (vamorolone) in Europe, as well as further development initiatives in the pipeline. Andrew Smith, the Chief Financial Officer of Santhera, expressed his satisfaction with the financing, emphasizing its non-dilutive nature and its alignment with the company's growth expectations and debt obligations.
As part of the deal, Santhera is monetizing 75% of its future royalty income streams from licensing agreements for AGAMREE with Catalyst Pharmaceuticals, Inc. for North America and Sperogenix Therapeutics Ltd. for China. R-Bridge will provide upfront payment of USD 30 million upon closing of the transaction, with additional milestone payments potentially totaling up to USD 38 million. The agreement includes caps on payments to R-Bridge, with the royalty payments reverting back to Santhera once certain thresholds are met.
In addition to the royalty monetization deal, Santhera has secured a CHF 35 million term loan from Highbridge, which will provide the company with a single draw of funds. The loan has a four-year maturity with amortization of 15% per year, starting after 24 months, and carries a cash interest rate of 3-month SARON (with a floor of 2%) plus 9.75% per year. The agreement also includes options for partial interest payments in kind and early loan redemption, subject to a premium.
Furthermore, as part of the transaction with Highbridge, the maturity of private senior unsecured convertible bonds with a strike price of CHF 10 and due in August 2024 will be extended by 12 months. Additionally, private senior unsecured convertible bonds with a strike price of CHF 5 and due in August 2024 will be converted. Highbridge will also exercise warrants it holds and receive 236,540 warrants, each exercisable for one Santhera share at an exercise price of CHF 11.0975 over a five-year period.
Santhera plans to use the net proceeds from these financings primarily to repay the outstanding amount of CHF 13.5 million of the public senior unsecured convertible bond due in 2024, as well as for product commercialization and general corporate purposes, with the aim of extending its cash runway to anticipated cash flow break-even.
Overall, these financing arrangements reflect Santhera's commitment to driving growth, repaying debt, and achieving financial stability as it continues to advance its innovative medicines for rare neuromuscular and pulmonary diseases.