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Acacia Pharma has in-licensed exclusive US rights to ultra-short-acting sedative, ByFavo™ (remimazolam) from Cosmo adding to its portfolio of near-market products
Cosmo will make a €10 million equity investment in Acacia Pharma and provide a new €35 million loan facility to support commercial activities
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014.
Cambridge, UK and Indianapolis, US – 10 January 2020: Acacia Pharma Group plc (“Acacia Pharma”, the “Company”, the “Group”), (EURONEXT: ACPH), a pharmaceutical company developing and commercialising hospital products for US and international markets, announces it has entered into a strategic in-licensing transaction with Cosmo Pharmaceuticals N.V. (SIX: COPN) (“Cosmo”). The transaction grants to the Group exclusive US commercialisation rights to ByFavo™ (remimazolam) and has been made alongside an equity investment and debt facility by Cosmo to finance the marketing efforts of both BARHEMSYS® and ByFavo.
A conference call will take place today, Friday 10 January 2020, at 14:00 CET/08:00 EST – details below.
ByFavo is an ultra-short-acting and reversible intravenous sedative/anaesthetic and a New Drug Application (“NDA”) is currently under review by the US Food & Drug Administration (“FDA”) with a target review (“PDUFA”) date of 5 April 2020.
Mike Bolinder, CEO of Acacia Pharma, said: “We are delighted to have in-licensed ByFavo, which provides an excellent complementary product opportunity to BARHEMSYS. Having a second product that shares the same calling points and attractive commercial message as BARHEMSYS will make the investment in our sales and marketing teams more efficient and will allow us to deliver better treatment options for physicians and patients. The equity investment from Cosmo is a great validation of Acacia Pharma and strengthens our balance sheet as we move towards the PDUFA date for BARHEMSYS, which is targeted for 26 February 2020. The availability of debt finance is also important as it will allow us to invest in the anticipated launch and commercialisation of BARHEMSYS and ByFavo. I am sure we have found in Cosmo the right partner for our future expansion.”
Alessandro Della Chà, CEO of Cosmo, said: “It took us more than six months of hard work to find the best possible US partner for ByFavo, following the same pattern as that of the RedHill transaction. We came to the conclusion that ByFavo, as much as Aemcolo, can better and faster achieve its sales potential within an organisation with significant commercial expertise and multiple products in the same market. If approved, both ByFavo and BARHEMSYS will share not only the same calling points but also the same compelling commercial message of reducing procedure and hospitalisation time. The deal gives Acacia Pharma the necessary means to boost its business focused on hospital and ambulatory surgical centre sales in the US and provides critical financing to accelerate its growth. This transaction is therefore consistent with our strategy to bundle our products into small and focussed companies in which we can have substantial equity stakes to participate in the potential growth in value. I am very satisfied by this synergy and I trust Acacia Pharma, with the help of Cosmo, will deliver the right reward both to its shareholders and to Paion as licensor, of which Cosmo also holds a major stake.”
About the transaction
Under the principal terms of the in-license agreement, Cosmo will be eligible for:
an upfront payment of €10 million from Acacia Pharma to be satisfied through the issue of 4,646,841 new ordinary shares of 2p in Acacia Pharma at €2.152 per share, being the 15-day volume weighted average share price up to 8 January 2020a €30 million payment from Acacia Pharma upon US approval of ByFavo, consisting of €15 million payable in cash and €15 million payable in cash or new ordinary shares at Acacia Pharma’s optiona €5 million payment upon first commercial sale of ByFavo in the US payable in cash or new ordinary shares at Acacia Pharma’s optionsales-related milestones of up to €105 million upon achieving pre-specified annual sales targets, andtiered double-digit royalties on US sales.
Under the terms of the agreement, Cosmo has also made a strategic equity investment in Acacia Pharma of €10 million by agreeing to subscribe for 4,347,826 new ordinary shares of 2p in Acacia Pharma at a price of €2.30 per share, based on the closing price on 8 January 2020. Following this investment, together with the shares issued in respect of the licensing agreement, Cosmo will own 8,994,667 ordinary shares of 2p in Acacia Pharma, representing 14.08% of its enlarged share capital.
In addition, Cosmo will make available to Acacia Pharma a new loan facility of up to €35 million, conditional on the achievement of certain specified milestones and in two tranches:
€10 million will become available on the US approval of BARHEMSYS, and€25 million will become available upon the US approval of ByFavo.
The loans will be interest-only until January 2023 and repayable over the ensuing 24 months. Until such time as the group’s existing loan facility with Hercules Growth Capital is repaid in full, the Cosmo facility will be unsecured and bear interest at 11% per annum. Thereafter, the loan will be secured upon assets of the Group and bear interest at 9%.
Cosmo will be entitled to appoint one director to the Acacia Pharma Board of Directors.
The transaction will not require shareholder consents.