Date: 2013-01-16
Type of information: Private placement
Company: Pharming (The Netherlands)
Investors: syndicate of existing specialised and institutional investors led by Kingsbrook Opportunities Master Fund LP
Amount: €16.35 million
Funding type: convertible bond financing
Planned used: The proceeds from this facility is foreseen to secure Pharming’s cash runway throughout the upcoming regulatory approval process in the USA.
Others: Pharming Group has entered into a financing of €16.35 million (€ 15.3 million net proceeds after subtraction of transaction fees and a 2% issuers discount) by means of a convertible bond with a syndicate of existing specialised and institutional investors led by Kingsbrook Opportunities Master Fund LP. This financing is subject to shareholder approval to be requested at an upcoming extraordinary meeting of shareholders on February 28th, 2013. The bonds will have a fixed conversion price of €0.03. The bonds may be redeemed in cash or shares at the option of the Company in seven monthly tranches between March and September 2013 and carry a coupon of 8.5% percent per annum. The facility will be amortized according to 93.5% of the lowest ten VWAP’s (Volume Weighted Average Price) over each 20 day pricing period. The investors will also be receiving 30% warrant coverage. The warrants will be exercisable for five years as of the EGM and have an exercise price of €0.03. The Company will issue at closing of the facility, an aggregate of 180 million shares as down payment to the investors for the first amortization(s). The investors will provide the Company with an irrevocable proxy to support the proposals at the upcoming EGM. Pharming shall publish a prospectus on its website in respect of the listing and trading of these shares, which is expected to commence on February 1st, 2013, the day following the record date of the EGM. For as long as the convertible notes are outstanding, the Company will not call any additional tranches from the existing Equity Working Capital Facility, under which €5.1 million additional financing remains available.
The proceeds from this facility, which follows the receipt in November 2012 of a US$10 million milestone payment from Santarus related to the positive read out of the pivotal US Phase III clinical study of Ruconest®, will further strengthen the balance sheet and is foreseen to secure Pharming’s cash runway throughout the upcoming regulatory approval process in the USA. The submission of a Biologics License Application (BLA) for Ruconest®, to the FDA is expected in the first half of 2013, followed as a next step by the decision of the FDA on acceptance of the BLA for the review within 60 days after this submission, at which point an a dditional US$5 million milestone will be payable from Santarus to Pharming.
Sijmen de Vries, Pharming CEO, said: “ We believe that, in combination with the ongoing reduction of our cost base through the downsizing of our infrastructure and organisation and the contingent milestone payments from Santarus of up to US$ 25 million associated with the US regulatory process, this financing represents a pivotal step forward towards delivering on our strategy of transitioning from a research driven cash-consuming biotech company to an externally focused, cash generativ e collaborative research and development business.”
Therapeutic area: Rare diseases
