DANBURY, Conn., March 13 /PRNewswire-FirstCall/ -- Penwest Pharmaceuticals Co. announced today that it has established a $24 million Senior Secured Credit Facility through Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services Inc. The Company expects that this new facility will provide sufficient financial resources to continue the implementation of its drug development strategy until at least late 2008.
The credit facility consists of a $12 million term loan drawn upon closing and the right, subject to certain conditions, to borrow up to an additional $12 million at any time through September 15, 2008. The credit facility will be secured by the Company's assets other than intellectual property. No warrants or other equity components are included in the terms, and the interest rate is fixed based on the one-month LIBOR rate at draw plus 5%.
"This credit facility will provide Penwest with increased financial flexibility as we continue to invest in the development of our pipeline of products," said Benjamin L. Palleiko, Senior Vice President, Corporate Development and CFO of Penwest. "We believe this facility is an attractive option to finance the Company's growth, as it offers a reasonable cost of capital and minimal dilution to our existing shareholders."
Penwest Pharmaceuticals
Penwest is a specialty pharmaceutical company dedicated to bringing to the marketplace innovative products that help improve the lives of patients. The Company's goal is to identify, develop and commercialize prescription products that address unmet medical needs, primarily for diseases of the nervous system. At the core of this strategy, Penwest applies drug delivery technologies, including its own proprietary technologies, to new and existing compounds to enhance their therapeutic profiles. The launch by Endo Pharmaceuticals in mid-2006 of Opana(R) ER (oxymorphone hydrochloride extended-release tablets) formulated with the Company's TIMERx(R) extended release delivery technology demonstrates the execution of this strategy and the value of the Company's TIMERx technology. The Company is currently applying its expertise to a pipeline of potential products that are in various stages of development. The Company intends to commercialize these products independently or through third party alliances.
The matters discussed herein contain forward-looking statements that involve risks and uncertainties, which may cause Penwest's actual results in future periods to be materially different from any future performance suggested herein. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words, "believes," "anticipates," "plans," "expects," "intends," "potential," and similar expressions are intended to identify forward-looking statements. Important factors that could cause results to differ materially include: risks relating to the commercial success of our products; regulatory risks relating to drugs in development, including the timing and outcome of regulatory action; uncertainty of success of collaborations; the timing of clinical trials and whether the results of clinical trials will warrant further clinical trials or warrant submission of an application for regulatory approval of, or the regulatory approval of, the product that is the subject of the trial; actual and potential competition; the need for capital; and other risks as set forth under the caption Risk Factors in Penwest's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2006, which risk factors are incorporated herein by reference.
The forward-looking statements contained in this press release speak only as of the date of the statement made. Penwest disclaims any intention or obligation to update any forward-looking statements.
Contacts: Investors: Ben Palleiko/Diane D'Alessandro (203) 796-3706 (877) 736-9378 Media: Caroline Gentile/Laura Walters Kekst and Company (212) 521-4800
Penwest Pharmaceuticals Co.CONTACT: Investors: Ben Palleiko, or Diane D'Alessandro, +1-203-796- 3706,+1-877-736-9378; or Media: Caroline Gentile, Laura Walters, both of Kekstand Company, +1-212-521-4800
