11/14/2016 10:11:55 AM
LEIDEN, Netherlands, Nov 14, 2016 (PR Newswire Europe via COMTEX) -- LEIDEN, Netherlands, November 14, 2016 /PRNewswire/ --
- Total Financing Package Consisting of up to EUR87 Million, Planned to Consist of Debt, Convertible Bonds and a Rights Issue
- Terms Agreed for a New Debt Financing Facility of US$40 million (Approximately EUR37 Million) With Existing and New Lenders
- Cornerstone Orders for a New Convertible Bond Instrument of EUR17 Million to Date
- Rights Issue to Raise Balance of Funding Expected to be Launched Shortly
Pharming Group N.V. ("Pharming" or "the Company") today announced that it has made significant progress with financing towards completion of the transaction with subsidiaries of Valeant Pharmaceuticals International, Inc. signed on 8 August 2016 for Pharming to acquire the commercialization rights to its own product RUCONEST(R) in North America.
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The Company has signed a term sheet with a syndicate of debt providers for a US$40 million, 42 months debt facility on standard commercial terms (8% interest and one-off 9% final payment at maturity in June 2020). The syndicate includes one of the Company's current lenders. The documentation for the loan instrument is being completed over the coming weeks. The facility is conditional on Pharming raising a minimum amount of EUR40 million of convertible debt and equity.
Cornerstone investors have also been found for EUR17 million so far for a five year redeemable convertible bond which will be convertible into shares at a premium of 25% to the 20-day volume weighted average price (VWAP) of the shares for the period prior to the approval of the prospectus by the Netherlands Authority for the Financial Markets (AFM) to be published in connection with the rights issue (Prospectus). The bonds have an 8.5% interest rate and a 20% warrant coverage. The warrant will also convert at 25% premium to the VWAP. Further orders for additional amounts of these bonds are currently being gathered from institutional investors.
Following the confirmation of the size of the convertible bond, expected later this week and the approval of the Prospectus, the Company will launch a rights issue for the balance of the funds (which, in the absence of additional investors in the convertible bond, will be up to EUR33 million) to existing shareholders to subscribe for new shares (Rights Shares) at a discount to the VWAP. This discount will be kept as small as possible to reduce dilution of the Company's share price. In the event that not all of the Rights Shares are taken up during the exercise period, the remaining shares represented by rights not taken up (so called Rump Shares) will be placed with interested institutional investors in the US and EU immediately at the same price. Institutional investors who sign up for this before the offer closes to support the issue will receive 25% warrant coverage at a 25% premium to the VWAP. Only the Rights Shares and Rump Shares will be issued in connection with the acquisition. Those shares that are represented by warrants and convertible bonds will only be issued upon future, subsequent conversion, at a 25% premium to the VWAP.
The Company has also been offered and is evaluating the merits of premium priced alternative convertible equity instruments, periodically redeemable in cash or equity at the discretion of the Company. Such instruments could be used alongside the convertible bond and debt and would then come in lieu of part or all of the Rights Issue. Usage of such instruments, in combination with the debt and the convertible bond, would then further reduce or totally eliminate the need to issue equity at the time of the closing.
Dr Sijmen de Vries, Pharming's CEO commented:
"We are very pleased to have put together a financing package and have alternatives at hand that minimize dilution of existing shareholders and which is attracting high-quality investors, so that we can complete the transaction with Valeant, move RUCONEST forward and will enable Pharming to reach profitability potentially as much as three years earlier than under the Valeant license. With such a financing package we expect to stay well within the limits of the available share capital to help manage dilution for shareholders. Together with the excellent prophylaxis data which was presented at the American College of Allergy, Asthma and Immunology scientific meeting in San Francisco yesterday and the positive opinion of the European Committee for Medicinal Products for Human Use to allow self-administration for patients in Europe announced on Friday, the future for RUCONEST(R) is very promising and we are confident that we are creating good value for shareholders, patients and other stakeholders."
About Pharming Group N.V.
Pharming is a specialty pharmaceutical company developing innovative products for the safe, effective treatment of rare diseases and unmet medical needs. Pharming's lead product, RUCONEST(R) (conestat alfa) is a recombinant human C1 esterase inhibitor approved for the treatment of acute Hereditary Angioedema ("HAE") attacks in patients in Europe, the US and rest of the world. The product is available on a named-patient basis in other territories where it has not yet obtained marketing authorization.
RUCONEST(R) is commercialized by Pharming in Algeria, Andorra, Austria, Bahrain, Belgium, France, Germany, Ireland, Jordan, Kuwait, Lebanon, Luxembourg, Morocco, Netherlands, Oman, Portugal, Qatar, Syria, Spain, Switzerland, Tunisia, United Arab Emirates, United Kingdom and Yemen.
RUCONEST(R) is distributed by Swedish Orphan Biovitrum AB (publ) (ss:SOBI) in the other EU countries, and in Azerbaijan, Belarus, Georgia, Iceland, Kazakhstan, Liechtenstein, Norway, Russia, Serbia, and Ukraine.
RUCONEST(R) is distributed in the United States by a subsidiary of Valeant Pharmaceuticals International, Inc. , following Valeant's acquisition of Salix Pharmaceuticals, Ltd.
RUCONEST(R) is distributed in Argentina, Colombia, Costa Rica, the Dominican Republic, Panama and Venezuela by Cytobioteck, in South Korea by HyupJin Corporation and in Israel by Megapharm.
RUCONEST(R) is also being investigated in a Phase II clinical trial for the treatment of HAE in young children (2-13 years of age) and evaluated for various additional follow-on indications.
Pharming's technology platform includes a unique, GMP-compliant, validated process for the production of pure recombinant human proteins that has proven capable of producing industrial quantities of high quality recombinant human proteins in a more economical and less immunogenetic way compared with current cell-line based methods. Leads for enzyme replacement therapy ("ERT") for Pompe and Fabry's diseases are being optimized at present, with additional programs not involving ERT also being explored at an early stage at present.
Pharming has a long term partnership with the China State Institute of Pharmaceutical Industry ("CSIPI"), a Sinopharm company, for joint global development of new products, starting with recombinant human Factor VIII for the treatment of Haemophilia A. Pre-clinical development and manufacturing will take place to global standards at CSIPI and are funded by CSIPI. Clinical development will be shared between the partners with each partner taking the costs for their territories under the partnership.
Pharming has declared that the Netherlands is its "Home Member State" pursuant to the amended article 5:25a paragraph 2 of the Dutch Financial Supervision Act.
Additional information is available on the Pharming website: http://www.pharming.com
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