Santhera announces an improvement in the liquidity situation | News

Ad hoc announcement in accordance with Art. 53 of the CoR

  • Change the payment date for milestones to ReraGen reduces short-term liquidity requirements
  • Provision of additional financing up to CHF 40 million

Pratteln, Switzerland, 2.June 2022 Santhera Pharmaceuticals (SIX: SANN) announces that the Company has renegotiated the date of an upcoming payment to its partner ReveraGen, reducing the Company’s short-term financial liabilities by CHF 20 million. Santhera has also increased its current financing agreement with some funds managed by Highbridge Capital Management, LLC (“Highbridge”), providing additional financing of up to CHF 40 million. Santhera assumes it was arrangement
in fact i.e.i.e. liquidityReception until 2023 or until the approval of vamorolone in the USto continue
will be, (subject to award accelerated procedure,
priority inspection) in firstn the expected quarter of 2023.

Structured milestone payments reduce short-term cash requirements by up to $ 20 Millions (40%)
FDA approval of vamorolone would result in a milestone payment of $ 40 million to ReveraGen. An amendment to the contract with ReveraGen was negotiated to reduce the registration phase by $ 20 million in exchange for a $ 20 million increase in sales (if annual vamorolone sales reach $ 100 million). The approval milestone will be further reduced by up to $ 4 million in monthly payments already made and yet to be paid to ReveraGen. In addition, Idorsia is expected to receive a payment of $ 10 million at approval. In summary, the new deal would lower the US vamorolone approval milestone from $ 50 million to $ 26 million, subject to a total of 4 million in donations prior to approval.

Increased funding from Highbridge to CHF 40 million sufficient to cover liquidity needs until Q1-2023
Highbridge has committed to extending the existing financing agreement with Santhera and providing up to CHF 40 million of new convertible unsubordinated covered bonds. Of this amount, approximately CHF 8.5 million will be used to refinance the outstanding convertible bonds.

Such an instrument allows for periodic payouts (based on the fulfillment of certain criteria, assessment of liquidity and other funding sources and a sufficient number of available exchangeable shares) and can be exchanged by Highbridge for shares at a discount to VWAP (volume weighted average price), with a floating limit bottom rate. The maturity of the new convertible bond is May 2024. The new convertible bond bears interest at a fixed interest rate which Santhera can pay in cash or in kind at between 12% and 16% per annum.

Andrew Smith, Santhera’s chief financial officercommented, “We are delighted to have successfully renegotiated the deal with ReveraGen, which demonstrates their confidence in the commercial success of vamorolon. Additional financing from Highbridge is to provide financing pending approval. We appreciate their continued support. . ” these measures have significantly increased our short-term financing needs, especially in times of market volatility.

financingamazing view
In September 2021, Santhera provided mixed equity and debt financing of up to CHF 42 million (net), eliminating the debt overhang by paying off the 2017/22 convertible bonds and providing sufficient liquidity by mid-2022. In addition to the increased Highbridge funding announced today, additional capital is required to support the commercialization of vamorolone, pay for regulatory targets in the US, and service Santhera’s outstanding debt.

The difficult market environment caused by the general crisis on the capital markets and geopolitical volatility makes it difficult to raise new capital. In response, the Company is considering various potential options for further enhancing liquidity, which may include structured finance with royalties and out-licensing in addition to or in lieu of a rights offering and / or private equity investment (PIPE).

To achieve the profitability of vamorolone in DMD, which is currently expected no earlier than the second half of 2024, Santhera estimates that the company will need an additional CHF 40-50 million to finance operations, including US milestone payments and debt service. As announced today, this is around 50% less than the previously communicated funding requirement of around CHF 100 million.

calculated santhera
Santhera Pharmaceuticals (SIX: SANN) is a Swiss specialist pharmaceutical company specializing in the development and commercialization of innovative drugs for rare neuromuscular and pulmonary diseases with high unmet medical needs. Santhera is exclusively licensed for all indications worldwide for vamorolone, a dissociative steroid with a new mode of action that was tested in a pivotal trial in DMD patients as an alternative to standard corticosteroids. The company plans to end an NDA staged agreement with the US FDA in June 2022. The clinical line also includes lonodelstat for the treatment of cystic fibrosis (CF) and other neutrophilic lung diseases. Santhera has licensed its first approved product, Raxone (idebenone), outside of North America and France to the Chiesi Group for the treatment of Leber’s Hereditary Optic Neuropathy (LHON). For more information, visit www.santhera.com.

Raxone is a trademark of Santhera Pharmaceuticals.

For more information please contact:
public-relations@santhera.com or
Eva Kalias, director of investor relations and communications
Telephone: +41 79 875 27 80
eva.kalias@santhera.com

Disclaimer / Forwardlooking
reports
This announcement does not constitute an offer or an incentive to subscribe to or purchase any securities of Santhera Pharmaceuticals Holding AG. This publication may contain certain statements about the future of the company and its operations. Such statements involve certain risks, uncertainties and other factors that could cause the actual future results, financial condition, results or achievement of the Company’s objectives to differ materially from those expressed or implied in such statements. Therefore, readers should not overly rely on these statements, particularly in relation to any contract or investment decision. The company disclaims any obligation to update these statements.

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