- GENFIT signs royalty
financing deal with HealthCare Royalty (HCRx) providing up to €185
million non-dilutive capital:
- €130 million upfront, with
eligibility to receive up to €55 million in two additional
instalments based on near-term milestones
- Closing subject to approval
by the 2025 OCEANE bondholders at upcoming bondholders
meeting
- Financing would extend cash
runway beyond the end of 2027, assuming drawdown of all
instalments
- Proceeds to further
strengthen the development of the ACLF pipeline
- In return, HCRx will
receive a portion of royalties on global1
sales of Iqirvo® (elafibranor) payable to GENFIT under its
licensing agreement with Ipsen, up to an agreed upon cap after
which all future royalties will revert back to GENFIT
- GENFIT retains rights to
all future regulatory, commercial and sales-based milestone
payments from Ipsen under the Ipsen agreement
- GENFIT to concurrently
propose a repurchase of the 2025 OCEANEs aiming to completely
eliminate GENFIT’s convertible debt overhang
Lille (France), Cambridge
(Massachusetts, United States), Zurich (Switzerland), January 30,
2025 - GENFIT (Nasdaq and Euronext:
GNFT), a late-stage biopharmaceutical company dedicated to
improving the lives of patients with rare and life-threatening
liver diseases (the “Company”), today announces
that it has entered into a non-dilutive capped royalty financing
agreement with HealthCare Royalty (HCRx) for up to €185 million,
and debt overhang resolution plan.
Pascal Prigent, CEO of GENFIT,
commented: “This non-dilutive financial agreement is a pivotal step
in strengthening our financial outlook, extending our cash runway
beyond 2027. We are also proposing to repurchase the outstanding
2025 OCEANE bonds to eliminate our convertible debt overhang. This
financing transaction will position GENFIT to operate on strong
foundations to deliver on its R&D pipeline objectives in
ACLF.”
Clarke Futch, Chairman and Chief
Executive Officer of HCRx, added: “With this investment,
HCRx underscores its commitment to supporting innovative
biopharmaceutical companies that create long-term value. We firmly
believe in the strong potential that Iqirvo® delivers to patients
with high unmet medical need, and are excited to collaborate with
GENFIT on this transaction.”
Highlights
In December 2021, GENFIT entered into a
long-term strategic partnership with Ipsen (the “Ipsen
agreement”). The agreement grants Ipsen an exclusive
worldwide license (excluding China, Hong Kong, Taiwan and Macau for
which Terns Pharmaceuticals has a prior license) to develop,
manufacture, and commercialize elafibranor for people living with
Primary Biliary Cholangitis (PBC), and in other indications. Under
the terms of the Ipsen agreement, GENFIT is eligible for
regulatory, commercial, and sales-based milestone payments and
royalties, based on product sales.
In 2024, Iqirvo® (elafibranor) received
accelerated approval from the U.S. Federal Drug Administration for
sale in the United States and conditional marketing authorization
in the European Union for the treatment of PBC in combination with
ursodeoxycholic acid (UDCA) in adults with an inadequate response
to UDCA or as a monotherapy in patients unable to tolerate UDCA.
Under the terms of the royalty financing agreement with HCRx,
GENFIT intends to monetize a portion of the royalty payments due
under the Ipsen agreement.
Today’s agreement with HCRx includes an upfront
payment of €130 million and up to €55 million via two additional
instalments of €30 million and €25 million, respectively, based on
near-term milestones being met.
Payment of the €130 million instalment will take place as soon
as possible after the closing conditions are met. Payment of each
additional instalment is subject to certain sales milestones for
Iqirvo® (elafibranor), and can be exercised at the discretion of
GENFIT upon achievement of such milestones.
HCRx will be compensated and repaid out of a portion of the
royalties which GENFIT is eligible to receive from its partner
Ipsen. Cumulative payment to HCRx is capped at a maximum value and
subject to time-limits as described below. Once the cap or
time-limit is met, all future royalties will revert back to GENFIT.
GENFIT retains the right to receive any regulatory, commercial and
sales-based milestone payments under the Ipsen agreement, including
the €26.55 million milestone expected in 2025 pending a third
pricing and reimbursement approval of Iqirvo® (elafibranor) in a
major European market.
The royalties will be paid into a dedicated
account and GENFIT will grant a security interest on the
corresponding portion of the royalty receivables.
To grant the security interest on the royalty
receivable, GENFIT will require the consent of the holders of the
bonds convertible into new shares and/or exchangeable for existing
shares due October 16, 2025 (the “2025 OCEANEs”). GENFIT will thus
convene a bondholders’ meeting seeking such consent. 2025 OCEANEs
bondholders will receive a consent fee if the resolutions proposed
by GENFIT are approved. Concurrently, GENFIT will also propose to
all interested holders to repurchase their 2025 OCEANEs at the same
conditions, with repurchase being subject to the closing of the
royalty financing. Payment of the consent fee will take place after
the 2025 OCEANEs have been repurchased and cancelled.
2025 OCEANEs bondholders are invited to contact
GENFIT and its agents over the next several days to discuss the
terms of the 2025 OCEANEs repurchase. Once determined, interested
holders will sign bond repurchase agreements and GENFIT will
convene the bondholders’ meeting. If the bondholders approve the
necessary amendments to the 2025 OCEANEs’ terms and conditions,
then the closing of the royalty financing (i.e. the payment to
GENFIT of the first, €130 million instalment) will take place –
provided the other closing conditions are met.
This royalty financing will significantly extend
GENFIT’s cash runway, beyond the end of 2027, enabling the Company
to further develop its pipeline focused on Acute-on-Chronic Liver
Failure (ACLF) and support general corporate purposes. This is
based on current business assumptions and current R&D programs,
the repurchase and/or reimbursement of the 2025 OCEANEs at maturity
and drawing down all instalments of the royalty financing. It also
assumes that we will receive near-term milestone revenue from
Ipsen, subject to successful pricing and reimbursement approval in
a third major European country and Ipsen meeting sales-based
thresholds.
Detailed description
- Main
terms of the proposed royalty financing
The royalty financing takes the form of an
issuance by GENFIT of straight bonds to be subscribed by HCRx (the
“Royalty Financing Bonds”), for an aggregate
subscription price plus premium of up to €185 million (the
“Subscription Price”, with a nominal value of
€9,250,000). The Royalty Financing Bonds’ subscription price would
be payable in up to three instalments as follows:
- A first
instalment for a total subscription amount of €130 million to be
issued as soon as possible following approval of the 2025 OCEANEs
bondholders at the bondholders meeting to be held in March 2025 and
satisfaction of other customary closing conditions;
- A second
instalment for a total subscription amount of €30 million, subject
to net sales of Iqirvo® (elafibranor) reaching a certain threshold
by December 31, 2025; and
- A third
instalment for a total subscription amount of €25 million, subject
to net sales of Iqirvo® (elafibranor) reaching a certain threshold
by December 31, 2026.
Payment of the second and third instalments are
at the option of GENFIT, provided the corresponding conditions are
met.
The Royalty Financing Bonds issued by GENFIT
will not bear interest. Instead, the returns on these bonds will be
tied to a portion of the royalties GENFIT receives under the Ipsen
agreement from October 1, 2024. This portion of the royalties is
subject to the following caps and time-limits:
- An annual cap
equal to the amount of royalties based on an annual maximum amount
of net sales of €600 million. The Company will receive 100% of the
royalties based on the annual net sales exceeding this
maximum.
- A combined
overall cap and time-limit determined as follows: When the
cumulated amount of royalties received by HCRx will represent 155%
of the Subscription Price of the Royalty Financing Bonds, excluding
the nominal value (i.e., approximately €277.5 million if all
instalments of the Subscription Price are paid), it will no longer
be entitled to the royalties, which will, from then on, fully
revert to the Company. If, at December 31, 2030, the cumulated
amount of royalties received by HCRx represents less than this 155%
return rate, it will continue to receive the royalties until the
cumulated amount received represents 195% of the Subscription Price
excluding the nominal value (i.e., up to a maximum of €351.5
million if all instalments of the Subscription Price are paid). If,
at December 31, 2033, this 195% return rate is not achieved, HCRx
will continue to receive the royalties until the cumulated amount
received equals 250% of the Subscription Price excluding the
nominal value (i.e., up to a maximum of € 453.25 million if
all instalments of the Subscription Price are paid).
- A final
time-limit corresponding to the earlier of the following two dates:
(i) the date on which the Company would no longer be entitled to
receive royalties under the Ipsen agreement, and (ii) March 31,
2045 (notwithstanding the fact that none of the above return rates
would have been achieved).
- When either of
the above cap/time limit is reached, the Company must repay the
nominal amount of the Royalty Financing Bonds (i.e.
€9,250,000).
HCRx’s recourse against GENFIT is limited to
GENFIT’s non-compliance with its contractual obligations under the
royalty financing documentation and repayment of the nominal value
of the Royalty Financing Bonds (€9,250,000).
To secure its payment and repayment obligations
under the Royalty Financing Bonds, GENFIT will transfer the
corresponding royalty receivables to a French law trust
(fiducie-sûreté) for the benefit of the holders of the royalty
financing bonds. To grant the security interest on the royalty
receivable, the Company requires the consent of the 2025 OCEANEs
holders. GENFIT will thus convene a bondholders’ meeting seeking
such consent.
- Dual
Proposal to the 2025 OCEANEs holders
In October 2017, GENFIT issued 6,081,081 2025
OCEANEs for an initial nominal amount of €179,999,997.60 by way of
a private placement to institutional investors. On January 25,
2021, a bondholders meeting approved some amendments of the terms
of the remaining OCEANEs, in particular (i) the extension of the
maturity to October 16, 2025, and (ii) the increase of the
conversion ratio so that the 2025 OCEANEs entitle their holders to
receive new and/or existing GENFIT shares at a current
conversion/exchange ratio of 5.5 shares per 2025 OCEANE held.
Concurrently to these amendments, GENFIT
repurchased 2,895,260 2025 OCEANEs.
As of today, following conversions that took
place since this repurchase, there are 1,902,698 outstanding 2025
OCEANEs, amounting to a nominal amount of €56,319,860.80.
The 2025 OCEANEs are admitted to trading on
Euronext Access™ (ISIN: FR0013286903).
The terms and conditions of the 2025 OCEANEs
contains a negative pledge clause which limits the ability of the
Company to grant security interests to its creditors upon its
present or future assets or revenues. The granting of the
fiducie-sûreté is not permitted under this clause. The closing of
the Royalty Financing (i.e. the issuance of the first, €130 million
instalment of the Royalty Financing Bonds) is thus conditioned upon
the holders of the 2025 OCEANEs approving an amendment to the
negative pledge clause (the “Amendment of Terms”).
If the Amendment of Terms is approved2, the Company will pay a
consent fee (the “Consent Fee”) to the holders of
2025 OCEANEs still outstanding.
Concurrently with the Amendment of Terms, GENFIT
is proposing to repurchase the 2025 OCEANEs of any interested
holder (the “Repurchase” and, together with the
Amendment of Terms, the “Transaction”). The
Repurchase is subject to (i) the approval by the general meeting of
the 2025 OCEANEs holders of the Amendment of Terms, and (ii) the
closing of the Royalty Financing (i.e. the issuance of the first
€130 million instalment of the Royalty Financing Bonds).
The Consent Fee is subject to the same
conditions as the Repurchase. It will be paid after the Repurchase
has taken place. Therefore, it will not be paid in respect of 2025
OCEANEs that have been bought back by the Company in the context of
the Repurchase (or that have been converted prior to the date of
payment of the Consent Fee).
2025 OCEANEs holders interested in the
Repurchase are invited to contact (i) with respect to qualified
investors, GENFIT at investors@genfit.com or their
usual sales contact at Natixis, the
Solicitation Advisor, or at ld-m-equityflowsalescb@natixis.com or
at ld-secm-syndicate-team@natixis.com and (ii) with respect to
retail holders, the 2025 OCEANEs Bondholders Representative
(Représentant de la Masse) at genfit@aetherfs.com.
GENFIT will announce the definitive terms of the
Transaction in a subsequent communication scheduled for early
February 2025 (the “Repurchase Press Release”).
All the 2025 OCEANEs repurchased by the Company will be bought back
at the same repurchase price, which will be disclosed in the
Repurchase Press Release, which will also include the amount of the
Consent Fee.
The Company and the 2025 OCEANEs holders will
then be able to enter into agreements relating to the Repurchase,
which will remain contingent on and occur after the approval of the
Amendment of Terms by the 2025 OCEANEs holders and the closing of
the Royalty Financing.
A few days after the announcement of the
definitive terms of the Transaction to be set in the Repurchase
Press Release, the Company will convene a general meeting of the
2025 OCEANEs holders, which is expected to be held in early March.
A Consent Solicitation Memorandum will be published, together with
the documents required by French law.
The results of the general meeting and the
closing of the Royalty Financing will be announced in two
subsequent press releases.
These transactions were approved the Board of
Directors of GENFIT during their meeting on January 29, 2025.
Advisors
Van Lanschot Kempen acted as sole financial
advisor to GENFIT. Goodwin Procter LLP acted as lead legal advisor
to GENFIT, with Clifford Chance LLP acting as special legal advisor
on financing aspects of the transaction. Morgan, Lewis &
Bockius LLP and Racine Avocats acted as legal advisors to HCRx.
Natixis is acting as sole solicitation advisor
to assist GENFIT to seek the consent of the holders of the 2025
OCEANEs and in the repurchase of the 2025 OCEANEs. CMS Francis
Lefebvre is acting as legal advisor to GENFIT in the context of the
consent solicitation of the 2025 OCEANEs holders and the
Repurchase.
ABOUT HEALTHCARE ROYALTY
HealthCare Royalty (HCRx) is a leading royalty acquisition
company focused on commercial or near-commercial biopharmaceutical
products. With offices in Stamford, Conn., San Francisco, Boston,
London and Miami, HCRx has invested $5+ billion in over 90
biopharmaceutical products since inception. For more information,
visit https://www.hcrx.com. HEALTHCARE ROYALTY® and HCRx® are
registered trademarks of HealthCare Royalty Management, LLC.
ABOUT GENFIT
GENFIT is a late-stage biopharmaceutical company
committed to improving the lives of patients with rare,
life-threatening liver diseases whose medical needs remain largely
unmet. GENFIT is a pioneer in liver disease research and
development with a rich history and a solid scientific heritage
spanning more than two decades. Today, GENFIT has built up a
diversified and rapidly expanding R&D portfolio of programs at
various stages of development. The Company focuses on
Acute-on-Chronic Liver Failure (ACLF). Its ACLF franchise includes
five assets under development: VS-01, NTZ, SRT-015, CLM-022 and
VS-02-HE, based on complementary mechanisms of action using
different routes of administration. Other assets target other
serious diseases, such as cholangiocarcinoma (CCA), urea cycle
disorder (UCD) and organic acidemia (OA). GENFIT's expertise in the
development of high-potential molecules from early to advanced
stages, and in pre-commercialization, was demonstrated in the
accelerated approval of Iqirvo® (elafibranor3) by the U.S. Food and
Drug Administration, the European Medicines Agency and the
Medicines and Healthcare Regulatory Agency in the UK for Primary
Biliary Cholangitis (PBC). Beyond therapies, GENFIT also has a
diagnostic franchise including NIS2+® in Metabolic
dysfunction-associated steatohepatitis (MASH, formerly known as
NASH for non-alcoholic steatohepatitis) and TS-01 focusing on blood
ammonia levels. GENFIT is headquartered in Lille, France and has
offices in Paris (France), Zurich (Switzerland) and Cambridge, MA
(USA). The Company is listed on the Nasdaq Global Select Market and
on the Euronext regulated market in Paris, Compartment B (Nasdaq
and Euronext: GNFT). In 2021, Ipsen became one of GENFIT's largest
shareholders, acquiring an 8% stake in the Company's capital.
www.genfit.com
FORWARD LOOKING STATEMENTS
This press release contains certain
forward-looking statements, including those within the meaning of
the Private Securities Litigation Reform Act of 1995 with respect
to GENFIT, including, but not limited to statements about the
Company’s cash runway, the potential and management’s expectations
to receive royalties and near-term milestones under the Ipsen
Agreement, the meeting of the milestones necessary to draw down on
the second and third instalments under the royalty financing and
expected timing for convening a meeting of the 2025 OCEANEs
bondholders. The use of certain words, such as "believe",
"potential", "expect", “target”, “may”, “will”, "should", "could",
"if" and similar expressions, is intended to identify
forward-looking statements. Although the Company believes its
expectations are based on the current expectations and reasonable
assumptions of the Company’s management, these forward-looking
statements are subject to numerous known and unknown risks and
uncertainties, which could cause actual results to differ
materially from those expressed in, or implied or projected by, the
forward-looking statements. These risks and uncertainties include,
among others, the uncertainties inherent in research and
development, including in relation to safety of drug candidates,
cost of, progression of, and results from, our ongoing and planned
clinical trials, review and approvals by regulatory authorities in
the United States, Europe and worldwide, of our drug and diagnostic
candidates, pricing, approval and commercial success of elafibranor
in the relevant jurisdictions, exchange rate fluctuations, and our
continued ability to raise capital to fund our development, as well
as those risks and uncertainties discussed or identified in the
Company’s public filings with the AMF, including those listed in
Chapter 2 "Risk Factors and Internal Control" of the Company's 2023
Universal Registration Document filed on April 5, 2024 (no.
D.24-0246) with the Autorité des marchés financiers ("AMF"), which
is available on GENFIT's website (www.genfit.fr) and the AMF's
website (www.amf.org), and those discussed in the public documents
and reports filed with the U.S. Securities and Exchange Commission
("SEC"), including the Company’s 2023 Annual Report on Form 20-F
filed with the SEC on April 5, 2024, the Half-Year Business and
Financial Report dated September 19, 2024 and subsequent filings
and reports filed with the AMF or SEC or otherwise made public, by
the Company. In addition, even if the results, performance,
financial position and liquidity of the Company and the development
of the industry in which it operates are consistent with such
forward-looking statements, they may not be predictive of results
or developments in future periods. These forward-looking statements
speak only as of the date of publication of this press release.
Other than as required by applicable law, the Company does not
undertake any obligation to update or revise any forward-looking
information or statements, whether as a result of new information,
future events or otherwise.
CONTACTS
GENFIT | Investors
Tel: +33 3 2016 4000 | investors@genfit.com
GENFIT | Media
Stephanie Boyer – Press relations | Tel: +333
2016 4000 | stephanie.boyer@genfit.com
GENFIT | 885 Avenue Eugène Avinée, 59120 Loos -
FRANCE | +333 2016 4000 |
www.genfit.com
1 Excluding China, Hong Kong, Taiwan and Macau for which Terns
Pharmaceuticals has an exclusive license to develop and
commercialize elafibranor2 The required quorum is 1/5 of the
outstanding 2025 OCEANEs and the required majority is 2/3 of the
outstanding 2025 OCEANEs.3 Elafibranor is marketed and
commercialized in the U.S by Ipsen under the trademark Iqirvo®.
- GENFIT Announces Non-Dilutive Royalty Financing Agreement and
Debt Overhang Resolution Plan
Genfit (EU:GNFT)
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부터 1월(1) 2025 으로 2월(2) 2025
Genfit (EU:GNFT)
과거 데이터 주식 차트
부터 2월(2) 2024 으로 2월(2) 2025
