IRVINE, Calif., Sept. 26 /PRNewswire-FirstCall/ -- ISTA Pharmaceuticals,Inc. (Nasdaq: ISTA), today announced it has entered into an agreement with itslong-term shareholders, Deerfield Management, Sprout and Sanderling Venturesto provide ISTA with up to $65 million in financing through a flexible creditfacility. In conjunction with this committed funding, ISTA has drawn $40million and called its convertible debt for par, or $40 million, plus interestaccrued over the past quarter. ISTA will be able to draw up to an additional$25 million any time over the next 12 months, at management’s discretion interms of timing and amount drawn. “Deerfield, Sanderling, and Sprout are leading health care investors andalso three of ISTA’s largest investors, and we appreciate their continuedfunding of ISTA’s growth. This $65 million facility is the culmination offive months of assessing our business and strategic options,” stated VicenteAnido, Jr., Ph.D., President and Chief Executive Officer of ISTAPharmaceuticals. “Our goal was to ensure we could flexibly fund ISTA’s futuregrowth while minimizing dilution impact on our shareholders. We fully believethese corporate finance activities have the potential to give our shareholdersthe best potential return on their investment.
“We have made solid progress with our pipeline products and have a numberof upcoming catalysts. With our Bepreve NDA expected to file by the end ofthe year, results anticipated from our Xibrom 0.09% once-daily Phase IIIprogram to support an early 2009 sNDA filing, and results expected tosupplement our T-Pred NDA filing, which we plan on submitting in the firsthalf of 2009, we have three opportunities to build on our history of strongrevenue growth. We also anticipate reporting results before the end of 2008from our Phase II study with ecabet sodium for dry eye. In addition, we willbe conducting other important studies for patients and investors, particularlyXibrom in combination with Lucentis for age-related macular degeneration andXibrom for the treatment of dry eye.”
Concurrently, ISTA announced it has concluded its previously initiatedreview of its strategic alternatives. Finally, ISTA is continuing itsrelationship with Silicon Valley Bank and has a $10 million revolving creditfacility available to fund its working capital needs.
RBC Capital Markets acted as exclusive placement agent to ISTA for thefinancing.
Terms of $65 Million Committed Financing
Under the terms of the agreement, Deerfield Management, Sprout andSanderling Ventures have funded ISTA with $40 million today and committed upto $25 million in additional funding to be drawn by ISTA at its discretion forup to one year. Any amounts drawn accrue interest until maturity at a rate of6.5 percent per annum which is payable on a quarterly basis. Any funds drawnare repayable in one-third increments in 2011, 2012, and 2013.
In conjunction with the first $40 million draw, ISTA has agreed to issuewarrants for 12.5 million common shares at closing with an exercise price of$1.41 per share. ISTA can draw from the remaining $25 million in $5 millionincrements and will issue 500,000 warrants per $5 million drawn at a pricewhich is the higher of the market price of the stock at the time of the drawor $1.41 per share. Should ISTA draw the entire $65 million, it will haveissued a total of 15 million warrants. The warrants have a term of six yearsand carry anti-dilution protection should ISTA issue additional common shares,subject to exclusions for certain business development activities.
This news release is neither an offer to sell nor a solicitation of anoffer to buy any of the securities discussed herein, nor shall there be anysale of these securities in any state or other jurisdiction in which suchoffer, solicitation, or sale would be unlawful prior to registration orqualification under the securities laws of any state.
Conference Call
ISTA will host a conference call with a simultaneous webcast today,September 26, 2008, at 10:00 AM Eastern Time, to discuss the financingcommitment announced today and to provide a pipeline update. To access thelive conference call, U.S. and Canadian participants may dial 866-770-7051;international participants may dial 617-213-8064. The access code for thelive call is 99420468. To access the 24-hour audio replay, U.S. and Canadianparticipants may dial 888-286-8010; international participants may dial617-801-6888. The access code for the call is 54813054. This conference callalso will be webcast live and archived on ISTA’s website for 30 days athttp://www.istavision.com.
About ISTA Pharmaceuticals
ISTA Pharmaceuticals is an ophthalmic pharmaceutical company. ISTA’sproducts and product candidates addressing the $4.7 billion U.S. prescriptionophthalmic industry include therapies for inflammation, ocular pain, glaucoma,allergy, and dry eye. The Company currently markets three products and isdeveloping a strong product pipeline to fuel future growth and market share.The Company’s product development and commercialization strategy is to launcha new product every 12 to 18 months, thereby continuing its growth to becomethe leading niche ophthalmic pharmaceutical company in the U.S. Foradditional information regarding ISTA, please visit ISTA Pharmaceuticals’website at http://www.istavision.com.
Any statements contained in this press release which refer to futureevents or other non-historical matters are forward-looking statements.Without limiting the foregoing, but by way of example, statements contained inthis press release related to the filing of an sNDA for Xibrom 0.09% as aonce-daily treatment for the pain and inflammation associated with cataractsurgery, the filing of an NDA for Bepreve in the second half of 2008, thecompletion of additional T-Pred studies later this year or early 2009, theannouncement of ecabet sodium Phase II top-line results, ISTA’s expectation ofbringing a new product to market every 12 to 18 months and becoming theleading niche ophthalmic pharmaceutical company are forward-lookingstatements. Except as required by law, ISTA disclaims any intent orobligation to update any forward-looking statements. These forward-lookingstatements are based on ISTA’s expectations as of the date of this pressrelease and are subject to risks and uncertainties that could cause actualresults to differ materially. Important factors that could cause actualresults to differ from current expectations include, among others: timely andsuccessful implementation of ISTA’s strategic initiatives; delays anduncertainties related to ISTA’s research and development programs (includingthe difficulty of predicting the timing or outcome of product developmentefforts and the FDA or other regulatory agency approval or actions);uncertainties and risks regarding market acceptance of and demand for ISTA’sapproved products and the impact of competitive products and pricing;uncertainties and risks related to ISTA’s ability to properly manage itsgrowth; uncertainties and risks regarding the continued timely performance byISTA’s strategic partners of their respective obligations under existingcollaborations and licensing arrangements; uncertainties and risks related tothe continued availability of third party sourced products and raw materialson commercially reasonable terms, or at all; uncertainties and risks relatedto successful compliance with FDA and/or other governmental regulationsapplicable to ISTA’s facilities, products and/or business; uncertainties andrisks related to the scope, validity, and enforceability of patents related toISTA’s products and technologies and the impact of patents and otherintellectual property rights held by third parties; and such other risks anduncertainties as detailed from time to time in ISTA’s public filings with theU.S. Securities and Exchange Commission, including but not limited to ISTA’sAnnual Report on Form 10-K for the year ended December 31, 2007 and itsQuarter Reports on Form 10-Q for the quarters ended March 31 and June 30,2008.
SOURCE ISTA Pharmaceuticals
