MedinCell and EIB today announced the execution of the new
credit facility of 40 million euros following the previous
communication of Sept. 5th
Under the agreement, MedinCell will repay immediately to EIB
a previous 20 million euros loan and associated capitalized
interest
Extension of cash visibility (excluding potential additional
revenue from partners):
- 30 million euros of the credit facility drawable in Q4
2022
- Disbursement of remaining 10 million euros that is
conditioned to approval by U.S. FDA of the first product based on
MedinCell technology expected in H1 2023, will extend cash
visibility until at least Q1 2024
Each tranche of the new credit facility will be reimbursed 5
years after drawdown
Regulatory News:
“European Investment Bank is a strategic partner of MedinCell
(Paris:MEDCL) for many years now, said Jaime Arango, CFO of
MedinCell. We believe that this new financing preserves the
interests of the company and our shareholders as it implies a low
potential dilution. It gives us strong cash visibility until at
least Q1 2024. By then we should be at a strong maturity level with
a first product on market, two products in clinical Phase 3 and the
rest of the pipeline that continues advancing. Remuneration to EIB
is composed of low interest rates and a variable part linked to the
performance of the share price. It’s mutually beneficial for each
party.”
Main terms and conditions of credit facility
agreement
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.
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.
Business conditions to draw the tranche A and B, i.e. 30 million
euros, have been met. In accordance with the terms of the signed
agreement, prior to the 2nd tranche withdrawal, MedinCell will
repay immediately to EIB the 20 million euros loan signed in 2018
plus 3 million euros of capitalized interest. The proceeds will be
used towards the company R&D activities, from formulation to
clinical activities. The company estimates that its cash visibility
will be sufficient to cover its expenses until the drawing of the
3rd tranche, i.e. 10 million euros, conditioned by the approval by
U.S. FDA of the first product based on MedinCell technology
expected in the first semester of 2023.
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 (i) cash interest paid annually, (ii) capitalized interest
paid at maturity, and (iii) 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 immediately.
Conditions met.
Reimbursement of capital and
capitalized interests 5 years after drawdown of the Tranche
Remuneration
- 2% cash interest paid annually
- 4% capitalized interests paid at maturity of the tranche
- Warrants (see below)
Tranche B
10 million euros drawable immediately
after tranche A and repayment of 2018 loan (20M€ +2.8M€ of
capitalized interests)
Reimbursement of capital and
capitalized interests 5 years after drawdown of the Tranche
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 after mdc-IRM
approval by FDA, expected in H1 2023
Reimbursement of capital and
capitalized interests 5 years after drawdown of the Tranche
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,
including a change of control or change in senior management of the
Company.
Subject to certain terms and conditions, upon the occurrence of
usual events of default (i.e. including any payment default,
misrepresentation, cross default, non-respect of financial ratios,
non-extension of warrants maturity from 10 to 15 years in the next
general assembly) 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 linked with
associated potential dilution
The company estimates that the warrants for all tranches could
represent between 2% to 3% dilution.
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 1 euro per warrant. Each warrant will
entitle EIB to one ordinary share of MedinCell in exchange for the
exercise price.
The warrants’ strike price linked to each tranche, including
those of the Tranche A, will be equal to 95% of the volume weighted
average of the trading price of MedinCell’s ordinary shares over
the last 20 trading days preceding the day of the drawdown.
Therefore, the strike price has not been determined as of this
date. 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 as
described above, 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. This example assumes an
exercise price at 6 EUR for all three tranches, but that exercise
price will depend on the stock price prior to each drawdown.
Depending on the share price at the drawdown and based on the
current number of MedinCell shares (25,143,553), the company
estimates that the potential issue of warrants for all tranches
could represent between 2% to 3% dilution.
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
document are subject to change without notice. The distribution of
this press release may be subject to legal restrictions in certain
jurisdictions. Persons who come to know about this press release
are encouraged to inquire about, and required to comply with, these
restrictions.
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version on businesswire.com: https://www.businesswire.com/news/home/20221123005415/en/
MedinCell David Heuzé Head of Communications
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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