Santhera secures up to CHF 69 million to fund operations to break-even

Santhera’s AGAMREE for the treatment of DMD (Duchenne muscular dystrophy) as an alternative to standard corticosteroids is approved in the U.S. by the Food and Drug Administration (FDA), in the EU by the European Medicines Agency (EMA), and in the UK by the Medicines and Healthcare products Regulatory Agency (MHRA). Santhera has out-licensed rights to AGAMREE for North America to Catalyst Pharmaceuticals, Inc. and for China to Sperogenix Therapeutics.

The financing advances Santhera’s commercialization of AGAMREE across Europe and supports further clinical development, including post-approval commitments in Duchenne muscular dystrophy (DMD) and expansion into additional indications. The net proceeds from these financings will also be used to repay the outstanding amount of CHF 13.5 million of the public senior unsecured convertible bond due 2024.

“We are very pleased to have achieved significant financing goals for Santhera and our shareholders through these initiatives. The new financing is non-dilutive to shareholders, the royalty monetization is partial and capped, leaving upside potential to Santhera, and the debt repayment schedule aligns well with our growth expectations,” said Andrew Smith, Chief Financial Officer of Santhera. “Importantly, it addresses our near term debt obligations and provides us with sufficient funding to drive market launches and growth of AGAMREE in Europe and to pursue additional development programs for AGAMREE.”

Santhera is monetizing 75% of the future royalty income streams (net of any agreed payment obligations of Santhera to ReveraGen and Idorsia) from its licensing agreements for AGAMREE with Catalyst Pharmaceuticals, Inc. for North America and with Sperogenix Therapeutics Ltd. for China, in respect of net product sales occurring from July 1, 2024. R-Bridge will pay USD 30 million upfront upon closing of the transaction, less certain fees, and, in addition, staged sales-related milestone payments that, if achieved, would result in total payments to Santhera of up to USD 38 million.

Payments to R-Bridge are capped, and once the agreed threshold or duration of royalty payments is met, the North America and China royalty payments will revert back to Santhera. Santhera will retain certain rights to buy back the royalty income stream.

New loan from Highbridge

Santhera has entered into a commitment letter for a senior secured term loan financing with certain funds managed by Highbridge Capital Management, LLC (Highbridge), an existing investor in the Company. Subject to and upon closing, the financing instrument will provide CHF 35 million in a single draw. The loan has a four-year maturity with amortization in the amount of 15% per year, commencing after 24 months, and will pay a cash interest of 3-month SARON (floor of 2%) plus 9.75% per year. Santhera has agreed to an original issue discount and a redemption premium. Under certain conditions, Santhera has the option for partial interest payments in kind and/or early loan redemption, both subject to a premium.

As part of the transaction, Highbridge will (1) extend the maturity of the private senior unsecured convertible bonds, with a strike price of CHF 10 and due in August 2024, by 12 months, (2) convert the private senior unsecured convertible bonds, with a strike price of CHF 5 and due in August 2024, (3) exercise the warrants it holds, and (4) receive 236,540 warrants, each of which is exercisable for one Santhera share at an exercise price of CHF 11.0975 at any time during a five-year period.

(Press release / SK)