Regulatory News:
The approval obtained by the EIB is for a new credit facility
of 40 million euros
The new credit facility foresees that MedinCell
(Paris:MEDCL) repays in anticipation a previous 20
million euros loan signed in 2018 with the EIB
30 million euros of the credit facility could be drawn in Q4
2022, and the disbursement of the remaining 10 million euros is
subject to conditions that are expected to be met in 2023
Each tranche of the new credit facility will be reimbursed 5
years after drawdown
The signature of the new EIB credit facility is expected in a
few weeks after finalization of the legal documentation
New EIB financing extends MedinCell’s cash visibility until
at least the first quarter 2024
As the commercialization of the first treatment based on
MedinCell’s breakthrough technology is expected in 2023, the
European Investment Bank reiterates its support to the French
company with a new financing package of 40 million euros.
The new bullet credit facility agreement will take over from a
previous 20 million euros loan granted in 2018 by EIB, which terms
have been modified in June 2022 to pave the way for the new
agreement by including Teva Pharmaceuticals' revenues in the
calculation of the variable remuneration and the absence of
penalties for possible early repayments.
“We have a strong relationship with the European Investment Bank
which has been a strategic partner of MedinCell for many years,
said Jaime Arango, CFO of MedinCell. Conditions to draw the two
first parts of the new credit facility are already met and those to
draw the last part of 10 million euros should be filled in the
coming months. Therefore, the renewed support allows us to extend
our cash visibility until at least the first quarter of 2024, while
limiting the potential dilution for existing shareholders in the
short term. At that point, the company should have reached a new
level of maturity with regular revenue coming from a first product
on market, with at least two investigational products in clinical
Phase 3 and others in Phase 1 or 2, and with other programs at
formulation or preclinical stage developed on our own or with
partners.”
Main terms and conditions of credit facility
agreement
The credit facility is divided into a first tranche of 20
million euros (tranche A) and two tranches of 10 million euros
(tranches B and C). The disbursement of each tranche is subject to
the completion of certain conditions precedent specified in the
credit facility agreement.
The maturity date is five years after disbursement for each
tranche, which means that first reimbursement should occur in Q4
2027. The remuneration is tailored for each tranche separately,
with cash interest paid annually, capitalized interest paid at
maturity, and the potential capital gain under warrants based on
success of the future increase in the company's share price.
Tranche A
20 million euros drawable in Q4
2022
Remuneration
- 2% cash interest paid annually
- 4% capitalized interests paid at maturity of the tranche
- Warrants (see below)
Tranche B
10 million euros drawable in Q4
2022
Remuneration
- 2% cash interest paid annually
- Either 3% or 6% capitalized interests paid at maturity of the
tranche (depending on the number of projects in phase 3 and the
regulatory status for mdc-IRM at the time of disbursement)
- Warrants (see below)
Tranche C
10 million euros drawable under
following conditions expected to be met in 2023
- At least one product approved by the FDA > mdc-IRM approval
expected in H1 2023
- A new IND accepted OR at least one new program in Phase 3 >
mdc-TJK go to Phase 3 announced on August 29, 2022
Remuneration
- 2% cash interest paid annually
- Either 2 or 3% capitalized interests paid at maturity of the
tranche (depending on the number of projects in phase 3 and at
least one IND approved at the time of disbursement)
- Warrants (see below)
The three tranches will be available within 36 months following
the signature of the credit facility agreement.
The loan may, in certain circumstances, be prepaid, in whole or
in part, for a prepayment fee, either at the election of MedinCell
or because of EIB’s demand following certain prepayment events.
Subject to certain terms and conditions, upon the occurrence of
usual events of default EIB may demand immediate repayment by
MedinCell of all or part of the outstanding loan and/or cancel the
undisbursed tranches.
Terms and Conditions of the warrant’s agreement (to be signed
with the credit facility agreement)
A warrant is a security that entitles the holder (the EIB) to
buy new stock of the issuing company (MedinCell), at a fixed price
called the exercise price.
As part of the remuneration of the first tranche (A), MedinCell
will issue 175.000 warrants to the benefit of EIB. The number of
warrants to be issued to EIB as part of the remuneration of the
second and third tranches (B and C) will be determined based on the
average stock price before the subscription by the EIB. The
subscription price will be 0.01 euro per warrant. Each warrant will
entitle EIB to one ordinary share of MedinCell in exchange for the
exercise price.
The strike price of each warrant will be equal to 95% of the
volume weighted average of the trading price of MedinCell’s
ordinary shares over several trading days preceding the day the
issue price is set. The warrants will have a maturity of fifteen
years and will be exercisable following the earliest to occur of a
change of control event, or the maturity date (5 years) of each
tranche, or an event of default under the credit facility
agreement, or a repayment demand by the EIB under the loan
agreement.
EIB shall be entitled to a put option as an alternative to the
exercise of the warrants (subject to a cap equal to the drawn
amount under the credit facility agreement). It will require
MedinCell to buy back all or part of the warrants then exercisable
but not yet exercised in certain circumstances (for instance in
case of change of control or at the maturity date of the first
tranche or in case of event of default). In the context of a public
offering and under certain conditions, Medincell will benefit from
a call option to require EIB to sell to MedinCell (or a substitute
third party) all the warrants. Medincell will also benefit from a
right of first refusal on the warrants offered for sale to a third
party, subject to certain exceptions.
Should the EIB exercise the put option MedinCell will pay the
difference between the market value of the MedinCell's share at
that time and the exercise price of each warrant to EIB by means of
available cash, non-dilutive financing or alternatively a capital
raise. In the latter, if the first tranche of the warrants were
issued today and if the put option were exercised at 2x the
exercise price, the remuneration to EIB resulting warrants would
correspond to about 1 million euros for tranche A and about 2
million euros for each of tranche B and C .
MedinCell and the EIB will communicate upon definitive signature
of the credit facility and warrants agreements, which remain
conditional on the finalization of the legal documentation that is
expected in the coming weeks.
About MedinCell
MedinCell is a pharmaceutical company at premarketing stage that
develops a portfolio of long-acting injectable products in various
therapeutic areas by combining its proprietary BEPO® technology
with active ingredients already known and marketed. Through the
controlled and extended release of the active pharmaceutical
ingredient, MedinCell makes medical treatments more efficient,
particularly thanks to improved compliance, i.e. compliance with
medical prescriptions, and to a significant reduction in the
quantity of medication required as part of a one-off or chronic
treatment. The BEPO® technology makes it possible to control and
guarantee the regular delivery of a drug at the optimal therapeutic
dose for several days, weeks or months starting from the
subcutaneous or local injection of a simple deposit of a few
millimeters, fully bioresorbable. MedinCell collaborate with tier
one pharmaceuticals companies and foundations to improve Global
Health through new therapeutic options. Based in Montpellier,
MedinCell currently employs more than 150 people representing over
30 different nationalities.
www.medincell.com
This press release contains forward-looking statements,
including statements regarding Company’s expectations for (i) the
timing, progress and outcome of its clinical trials; (ii) the
clinical benefits and competitive positioning of its product
candidates; (iii) its ability to obtain regulatory approvals,
commence commercial production and achieve market penetration and
sales; (iv) its future product portfolio; (v) its future partnering
arrangements; (vi) its future capital needs, capital expenditure
plans and ability to obtain funding; and (vii) prospective
financial matters regarding our business. Although the Company
believes that its expectations are based on reasonable assumptions,
any statements other than statements of historical facts that may
be contained in this press release relating to future events are
forward-looking statements and subject to change without notice,
factors beyond the Company's control and the Company's financial
capabilities.
These statements may include, but are not limited to, any
statement beginning with, followed by or including words or phrases
such as "objective", "believe", "anticipate", “expect”, "foresee",
"aim", "intend", "may", "anticipate", "estimate", "plan",
"project", "will", "may", "probably", “potential”, "should",
"could" and other words and phrases of the same meaning or used in
negative form. Forward-looking statements are subject to inherent
risks and uncertainties beyond the Company's control that may, if
any, cause actual results, performance, or achievements to differ
materially from those anticipated or expressed explicitly or
implicitly by such forward-looking statements. A list and
description of these
risks, contingencies and uncertainties can be found in the
documents filed by the Company with the Autorité des Marchés
Financiers (the "AMF") pursuant to its regulatory obligations,
including the Company's registration document, registered with the
AMF on September 4, 2018, under number I. 18-062 (the "Registration
Document"), as well as in the documents and reports to be published
subsequently by the Company. In particular, readers' attention is
drawn to the section entitled "Facteurs de Risques" on page 26 of
the Registration Document.
Any forward-looking statements made by or on behalf of the
Company speak only as of the date they are made. Except as required
by law, the Company does not undertake any obligation to publicly
update these forward-looking statements or to update the reasons
why actual results could differ materially from those anticipated
by the forward-looking statements, including in the event that new
information becomes available. The Company's update of one or more
forward-looking statements does not imply that the Company will
make any further updates to such forward-looking statements or
other forward-looking statements. Readers are cautioned not to
place undue reliance on these forward-looking statements.
This press release is for information purposes only. The
information contained herein does not constitute an offer to sell
or a solicitation of an offer to buy or subscribe for the Company's
shares in any jurisdiction, in particular in France. Similarly,
this press release does not constitute investment advice and should
not be treated as such. It is not related to the investment
objectives, financial situation, or specific needs of any
recipient. It should not deprive the recipients of the opportunity
to exercise their own judgment. All opinions expressed in this
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are encouraged to inquire about, and required to comply with, these
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version on businesswire.com: https://www.businesswire.com/news/home/20220905005395/en/
MedinCell David Heuzé Communication leader
david.heuze@medincell.com +33 (0)6 83 25 21 86
NewCap Louis-Victor Delouvrier/Olivier Bricaud Investor
Relations medincell@newcap.eu +33 (0)1 44 71 94 94
NewCap Nicolas Merigeau Media Relations medincell@newcap.eu +33
(0)1 44 71 94 94
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