- The Company also provides an update on the Silicon Valley Bank
convertible debt facility
- Including the new C$12 million
convertible debt facility, Eupraxia anticipates it has sufficient
cash to fund its operations to the second quarter of 2025
VICTORIA, BC, Aug. 2, 2024
/PRNewswire/ - Eupraxia Pharmaceuticals Inc. ("Eupraxia" or
the "Company") (TSX: EPRX) (NASDAQ: EPRX), a clinical-stage
biotechnology company leveraging its proprietary Diffusphere™
technology to optimize drug delivery for applications with
significant unmet need, today announced entry into a new
C$12 million convertible debt
facility (the "Convertible Debt Facility").
Under the Convertible Debt Facility, Yabema Capital Limited and
other current Eupraxia shareholders (together, the "Lenders") will
make available for drawdown an aggregate amount of C$12 million for a period of 120 days following
entry into the agreement. The decision to draw on the facility
within 120 days of closing is at the discretion of Eupraxia
and is subject to the full and final release of the SVB Facility
(as defined below), originally agreed to on June 21, 2021.
The aggregate unpaid principal amount and any accrued and unpaid
interest thereon will be convertible at each individual lender's
discretion into Eupraxia common shares (the "Common Shares"), at a
conversion price equal to C$4.84375
per Common Share. The conversion is further subject to certain
threshold limitations with respect to each lender's aggregate
ownership of the Common Shares.
"The new convertible debt facility provides an important source
of additional funding from long term, supportive investors, and
creates greater stability to Eupraxia's cap structure as we
continue to advance our clinical programs in eosinophilic
esophagitis and osteoarthritis," said Dr. James Helliwell, Chief Executive Officer of
Eupraxia.
The Convertible Debt Facility is subject to final approval of
the Toronto Stock Exchange.
Update on existing contingent convertible debt facility with
Silicon Valley Bank and SVB Innovation Credit Fund (the "SVB
Facility")
The Company also announced today an update on its existing SVB
Facility with Silicon Valley Bank and SVB Innovation Credit Fund
(together, the "SVB Parties").
Under the terms of the SVB Facility, which matured on
June 21, 2024, the SVB Parties each
funded 50% of the total C$10 million
debt. The liability subsequently increased to C$12 million at maturity, consistent with the
terms of the facility. The Company has discharged fully the
obligation to SVB Innovation Credit Fund (C$6 million). Since June
21, 2024, the Company has been requesting payout
instructions with respect to the remaining settlement (C$6 million) and is presently in discussions with
the court-appointed liquidator of the SVB Parties in respect of
same. Final and full settlement is expected in the third quarter of
2024.
As a result, Eupraxia's total cash reserves will be reduced by
up to C$12 million to settle the debt
and the accrued and unpaid interest thereon held by the SVB
Parties.
Including the new C$12 million
convertible debt facility with the Lenders, Eupraxia reaffirms that
it has sufficient cash to fund its operations to the second quarter
of 2025.
About Eupraxia Pharmaceuticals Inc.
Eupraxia is a clinical-stage biotechnology company focused on
the development of locally delivered, extended-release products
that have the potential to address therapeutic areas with high
unmet medical need. The Company strives to provide improved patient
benefit and has developed technology designed to deliver targeted,
long-lasting activity with fewer side effects. DiffuSphere™, a
proprietary, polymer-based micro-sphere technology, is designed to
facilitate targeted drug delivery, with extended duration of
effect, and offers multiple, highly tuneable pharmacokinetic (PK)
profiles. This investigational technology can be engineered for use
with multiple active pharmaceutical ingredients and delivery
methods.
Eupraxia's EP-104GI is currently in a Phase 1b/2a trial, the RESOLVE trial, for the treatment
of eosinophilic esophagitis ("EoE"). EP-104GI is administered as an
injection into the esophageal wall, providing local delivery of
drug. This is a unique treatment approach for EoE. Eupraxia also
recently completed a Phase 2b
clinical trial (SPRINGBOARD) of EP-104IAR for the treatment of pain
due to osteoarthritis of the knee. The trial met its primary
endpoint and three of the four secondary endpoints. In addition,
Eupraxia is developing a pipeline of later and earlier-stage
long-acting formulations. Potential pipeline indications include
candidates for other inflammatory joint indications and oncology,
each designed to improve on the activity and tolerability of
currently approved drugs. For further details about Eupraxia,
please visit the Company's website at: www.eupraxiapharma.com.
Notice Regarding Forward-looking Statements and
Information
This news release includes forward-looking statements and
forward–looking information within the meaning of applicable
securities laws. Often, but not always, forward–looking information
can be identified by the use of words such as "plans", "is
expected", "expects", "scheduled", "intends", "contemplates",
"anticipates", "believes", "proposes", "estimates", "potential" or
variations (including negative and grammatical variations) of such
words and phrases, or state that certain actions, events or results
"may", "could", "would", "might" or "will" be taken, occur or be
achieved. Forward looking statements in this news release include
statements regarding the Company's new Convertible Debt Facility;
the plans to draw down on the Convertible Debt Facility; the
satisfaction of conditions precedent to the draw down on the
Convertible Debt Facility; the receipt of final approval from the
Toronto Stock Exchange; the sufficiency of the Company's cash to
fund its operations; expected timing of the full settlement of the
SVB Facility; the Company's business strategies and objectives,
including current and future plans and opportunities, expectations
and intentions; the Company's clinical trials, including with
respect to the potential for higher doses; the ability of the
Company to execute on its business strategy; the potential of
Eupraxia's product candidates; the Company's expectations regarding
its product designs, including with respect to patient benefit,
duration, safety, effectiveness and tolerability; the results
gathered from studies of Eupraxia's product candidates; the
potential and competitive advantages of Diffusphere™ in connection
with the drug delivery process; the advancement of opportunities
stemming from Diffusphere™ and the expansion of pipeline designs;
the benefits to patients from the Company's drug platforms and the
translation of the Company's technologies and expansion of its
offerings into clinical applications.
Such statements and information are based on the current
expectations of Eupraxia's management, and are based on
assumptions, including but not limited to: future research and
development plans for the Company proceeding substantially as
currently envisioned; industry growth trends, including with
respect to projected and actual industry sales; the Company's
ability to obtain positive results from the Company's research and
development activities, including clinical trials; and the
Company's ability to protect patents and proprietary rights.
Although Eupraxia's management believes that the assumptions
underlying these statements and information are reasonable, they
may prove to be incorrect. The forward–looking events and
circumstances discussed in this news release may not occur by
certain dates or at all and could differ materially as a result of
known and unknown risk factors and uncertainties affecting
Eupraxia, including, but not limited to: the Company's limited
operating history; the Company's novel technology with uncertain
market acceptance; if the Company breaches any of the agreements
under which it licenses rights to its product candidates or
technology from third parties, the Company could lose license
rights that are important to its business; the Company's current
license agreement may not provide an adequate remedy for its breach
by the licensor; the Company's technology may not be successful for
its intended use; the Company's future technology will require
regulatory approval, which is costly and the Company may not be
able to obtain it; the Company may fail to obtain regulatory
approvals or only obtain approvals for limited uses or indications;
the Company's clinical trials may fail to demonstrate adequately
the safety and efficacy of our product candidates at any stage of
clinical development; the Company may be required to suspend or
discontinue clinical trials due to side effects or other safety
risks; the Company completely relies on third parties to provide
supplies and inputs required for its products and services; the
Company relies on external contract research organizations to
provide clinical and non-clinical research services; the Company
may not be able to successfully execute its business strategy; the
Company will require additional financing, which may not be
available; any therapeutics the Company develops will be subject to
extensive, lengthy and uncertain regulatory requirements, which
could adversely affect the Company's ability to obtain regulatory
approval in a timely manner, or at all; the impact of health
pandemics or epidemics on the Company's operations; the Company's
restatement of its consolidated financial statements, which may
lead to additional risks and uncertainties, including loss of
investor confidence and negative impacts on the Company's common
share price; and other risks and uncertainties described in more
detail in Eupraxia's public filings on SEDAR+ (sedarplus.ca) and
EDGAR (sec.gov). Although Eupraxia has attempted to identify
important factors that could cause actual actions, events or
results to differ materially from those described in
forward–looking statements and information, there may be other
factors that cause actions, events or results to differ from those
anticipated, estimated or intended. No forward–looking statement or
information can be guaranteed. Except as required by applicable
securities laws, forward–looking statements and information speak
only as of the date on which they are made and Eupraxia undertakes
no obligation to publicly update or revise any forward–looking
statement or information, whether as a result of new information,
future events or otherwise.
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SOURCE Eupraxia Pharmaceuticals Inc.