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KemPharm, Inc. Bags $60 Million  
6/3/2014 6:33:54 AM

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KemPharm, Inc. Secures $60 Million Commitment from Deerfield

CORALVILLE, Iowa
, June 3, 2014 /PRNewswire/ -- KemPharm, Inc., a clinical stage biopharmaceutical company focused on the discovery and development of new, safer therapies to treat pain, announced today that it has entered into a $60 million financing agreement with an investment fund managed by Deerfield Management Company. Under the terms of the agreement, Deerfield agreed to provide $10 million through a secured senior convertible note, which is convertible into shares of KemPharm's stock, and up to an additional $50 million through a secured senior term debt facility.

At the initial closing of the transaction, which occurred on June 2, 2014, Deerfield provided $10 million through the convertible note and an initial $15 million through the term facility. KemPharm may access the remaining $35 million of the term debt upon the completion of certain pre-identified milestones. KemPharm plans to use the proceeds of this financing to fund its clinical, regulatory and operational growth, and, most notably, to advance its lead product candidate, KP201 (benzhydrocodone hydrochloride and acetaminophen), through potential FDA approval and into commercial development.

Additionally, in accordance with the financing agreement, Jonathan S. Leff, Partner with Deerfield Management, has been named to KemPharm's Board of Directors. Mr. Leff remarked, "We believe that KP201 and the rest of KemPharm's abuse-deterrent prodrugs could play an important role in helping to address the epidemic of opioid abuse. We are pleased to partner with KemPharm to advance the company's programs to potential FDA approval and commercialization."

Travis C. Mickle, Ph.D., President and CEO of KemPharm, commented, "This financial commitment by Deerfield significantly strengthens KemPharm and enables the rapid advancement of KP201 and our abuse-deterrent product pipeline. KemPharm now has the financial and strategic backing of a leading healthcare investment firm, which we intend to fully leverage as we deploy our prodrug technology to help address the limitations of existing opioid therapeutics and the epidemic problem of opioid abuse."

Gordon K. "Rusty" Johnson, COO & CFO of KemPharm, concluded, "This financing provides KemPharm with the near-term capital required to advance our corporate and clinical goals, while providing us with the additional flexibility to pursue opportunities that could further propel the value potential of the company. We look forward to benefiting from Deerfield's wealth of industry and capital markets expertise."

KP201 is composed of hydrocodone chemically bound to a ligand (benzhydrocodone hydrochloride) and acetaminophen and is in development for acute moderate to moderately severe pain and offers unique physicochemical and pharmacological attributes that may deliver additional patient benefits, including reduced potential for abuse and reduction or elimination of opioid-induced constipation (OIC). KemPharm's pipeline is further highlighted by a portfolio of abuse-deterrent assets that utilize the company's Ligand Activated Therapy (LAT) prodrug technology, including KP511, its hydromorphone prodrug for pain, KP606, its oxycodone prodrug for pain, and KP415, a prodrug of methylphenidate for the treatment of ADHD.

KemPharm did not use a placement agent in conjunction with this transaction and received legal representation from Morgan, Lewis & Bockius LLP and Simmons Perrine Moyer Bergman PLC.

About KemPharm

KemPharm is a biopharmaceutical company focused on the discovery and development of new chemical entities (NCEs) to treat serious medical conditions through its proprietary and broadly applicable Ligand Activated Therapy (LAT) approach. The company utilizes its LAT technology to generate improved prodrug versions of FDA approved drugs in the high needs areas of pain, ADHD and other CNS diseases. For more information on KemPharm, please visit the company's website at www.kempharm.com.

About Deerfield Management Company

Deerfield is an investment management firm committed to advancing healthcare through investment, information and philanthropy. For more information about Deerfield, please visit www.deerfield.com.

To the extent that any statements made in this press release are not historical, these statements are essentially forward-looking and intended to fall within the safe harbor rule for such statements under the Private Securities Litigation Reform Act of 1995. The information contained in the forward-looking statements is inherently uncertain, and KemPharm's actual performance and results may differ materially due to a number of factors, many of which are beyond KemPharm's ability to predict or control, including, among others, changes in competitive conditions, delays in KemPharm's product research and development cycles, unanticipated issues in complying with domestic or foreign regulatory requirements related to securing regulatory clearance or approvals for KemPharm's products, unanticipated intellectual property expenditures required to develop, market, and defend KemPharm's products, and KemPharm's ability to comply with debt covenants and conditions under its loan facilities. KemPharm cannot guarantee any future results, levels of activity, performance or achievement. Except as otherwise expressly required by federal securities laws, KemPharm undertakes no obligation to update any of its forward-looking statements after the date of this press release.

For KemPharm, Inc:

Media / Investor Contacts:

Gordon K. "Rusty" Johnson

Jason Rando / Joshua Drumm, Ph.D.

319-665-2575

Tiberend Strategic Advisors, Inc.

info@kempharm.com

212.375.2665 / 212.375.2664


jrando@tiberend.com


jdrumm@tiberend.com

SOURCE KemPharm, Inc.



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