Nicox Restructures Debt, Streamlines Operations to Extend Cash
Runway and Focus Resources on NCX 470 Pivotal Trial
Press Release
Nicox Restructures Debt, Streamlines Operations
to Extend Cash Runway and Focus Resources on NCX 470 Pivotal
Trial
-
Agreement in principle for an amendment to debt agreements
for outstanding bonds
-
Streamline corporate structure to focus on the completion
of the second NCX 470 Phase 3 trial, Denali; concomitant reduction
in the size of the Board of directors
- Cash
runway extended to November 2024
-
Extraordinary General Meeting to be called for 10 April
2024 on first convening
February 28, 2024 – release at 7:30 am CET Sophia Antipolis,
France
Nicox SA (Euronext Growth
Paris: FR0013018124, ALCOX), an international ophthalmology
company, today announced that it has signed an agreement in
principle to amend its debt agreements with funds and accounts
managed by BlackRock, Inc. and its affiliates ("BlackRock")1. The
debt restructuring is intended to facilitate future financing and
in parallel pursue strategic options which would allow the
completion of the NCX 470 Phase 3 clinical trial, Denali.
The debt restructuring and related signature of
the amended debt agreements (the “Closing”) will come into effect
upon: Nicox initiating the Board-approved streamlining of its
operating costs to focus on the completion of the Denali trial; and
calling an Extraordinary General Meeting (“EGM") to enable future
financing.
The debt restructuring together with a reduction
in operating costs allows for the interest-only period on the
entire outstanding debt to be continued to 30 September 2024,
extending the Company’s cash runway to November 2024. Subsequently
such interest only period would be further extended proportionally
with future increases in the cash runway, provided however that the
Company raises at least €3 million in equity financing by 30
September 2024, which would extend the cash runway into Q1
2025.
The Company’s core ophthalmology development and
key corporate functions will focus on the ongoing clinical
development of NCX 470 in the pivotal Denali trial, preparation of
a New Drug Application (NDA) and discussions on partnering and
other strategic opportunities.
“The additional cash runway and the overall
reduction in cash needs gives us the flexibility to advance our
core asset and continue partnering and strategic discussions.
Specifically, this provides an opportunity to deliver on the
promise of NCX 470 in glaucoma, and thereby to preserve and create
value. We trust that our shareholders will recognize this at the
Extraordinary General Meeting.” said Jean-François Labbé,
Chairman of the Board of Directors of Nicox. “We sincerely
thank our departing employees for their dedication and service, and
wish them every success in their future endeavors. We would also
like to thank the three Board members who are leaving us at this
time for their contributions to the Company.”
Debt Restructuring
Current Debt
Nicox has a total amount of €16.9 million2 debt
outstanding from Kreos Capital VI (UK) Limited (together with its
affiliates “Kreos”), in the form of amortizing and non-amortizing
bonds (the Amortizing Bond and the Non-Amortizing Bonds
respectively) as of 28 February 2024. Further details of the debt
are given in Section 23.2.1 of the consolidated annual accounts in
the Company’s Annual Report.
Payments up to 31 December 2025
- Under the
current bond agreement, Nicox was due to begin repaying the
Amortizing Bond to Kreos from 1 February 2024.
- Under the agreed
terms of the amendment announced today, Nicox will make payments of
interest only on the entire debt to Kreos until 30 September 2024,
based on a cash runway until November 2024. Provided that Nicox
raises at least €3 million in equity by 30 September 2024, the
interest-only period will be extended each time the cash runway is
increased, and no later than 31 December 2025.
- Nicox has the
option to make capital repayments as part of paying down the
Amortizing Bond. If Nicox decides not to make these payments, the
interest rate on the entire debt would increase to 13.5% (from
9.25%) until such payments are made.
- Nicox will pay
Kreos a 3% restructuring fee upon Closing.
Payments from 1 January 2026
- The
Non-amortizing Bonds are currently due to be repaid on 1 January
2026.
- Under the
amended agreement, Nicox may, at its sole discretion, repay only
part of these amounts, on 1 January 2026, and pay a fee on any
unpaid amount, in which case Nicox will continue to pay interest on
the remaining amount until 1 July 2026, which will be the final
term of the debt.
- The settlement
fee of 3% due on repayment of the entire debt due on 1 July 2026
shall be increased to 8% regardless of any pre-payments.
- Subject to a
favorable vote at the EGM, the existing Non-amortizing Convertible
Bond shall be cancelled and replaced with a new Convertible Bond at
a revised conversion price (€0.4312, the 30-day VWAP prior to
signature of the term sheet, subject to realignment with the next
equity raise). If such a vote is not obtained, Nicox would pay back
the loan in cash at the term together with a premium, which would
be calculated as if the new pricing has been set for the
convertible loan i.e. based on the share price increase at the time
of repayment. The repayment may be made in cash or cash and shares,
at Kreos’ discretion.
- Kreos still
holds 100,000 warrants to acquire Nicox shares at €4.2344 from a
previous debt restructuring in January 2021.
Additional obligations upon Nicox
Under the proposed amendment, Nicox undertakes
to:
- Immediately
initiate implementation of the Board decision to reduce its
operations in France and Italy to reduce operating costs and
optimize the structure of the Company for the completion of the
second phase 3 trial, Denali.
- Call an EGM to
vote on future financing resolutions and the changes to the
Convertible Bond noted above.
Execution of the loan agreement
- The agreement
between Nicox and Kreos is subject to Closing, which is expected to
take place by 31 March 2024.
- Nicox has
proposed a business plan for the remaining term of the Bonds based
on estimations of costs and expected revenue and are required to
meet and discuss if there are any material changes to such budget.
Any significant deviation from the plan would trigger a discussion
with Kreos.
- Kreos will
appoint two Observers (“censeurs”) to the Nicox Board of Directors,
subject to EGM approval.
Cash Runway and Cash Needs
The debt restructuring and cost reductions
extend the Company’s cash runway to November 2024, based on
focusing exclusively on the development of NCX 470.
The Company is pursuing business development
discussions, including the sale or license of certain assets, and
exploring multiple strategic options which could further extend the
cash runway. The Company is evaluating all options for financing
and will use the most appropriate at the time.
If the Company is unable to continue extending
the cash runway and hence the interest-only period of the
Amortizing Bond, the Company would be required to start repaying
the capital of the Amortizing Bond, and may not have sufficient
financial resources to do so, which could require the Company to
sell assets or take other necessary steps to safeguard the
situation in case it is unable to make the debt repayments.
Corporate Cost Reductions
The Company is planning to reduce its
operational costs to focus on the activities related to the Denali
Phase 3 trial only. The implementation by the Company of their
cost-reduction plan is a key feature of the debt restructuring
agreement. As such, the Company and its Italian subsidiary will be
reducing the number of employees. The development team in the U.S.,
considered essential for the completion of the Denali trial, is not
impacted by these changes.
Corporate Governance
Changes
In the context of the cost reduction and
downsizing, the following members of the Nicox Board of Directors
have tendered their resignation, effective immediately: Adrienne
Graves, Lauren Silvernail and Luzi von Bidder. These members will
not be replaced on the Board of Directors.
The Company will no longer be reporting
Consolidated Financial Statements under IFRS and will limit its
communication to statutory financial statements under French Gaap.
Further details will be given in the full year 2023 accounts,
currently expected to be published in April 2024.About
Nicox
Nicox SA is an international ophthalmology
company developing innovative solutions to help maintain vision and
improve ocular health. Nicox’s lead program in clinical development
is NCX 470, a novel nitric oxide-donating bimatoprost eye drop, for
lowering intraocular pressure in patients with open-angle glaucoma
or ocular hypertension. Nicox generates revenue from VYZULTA® in
glaucoma, licensed exclusively worldwide to Bausch + Lomb, and
ZERVIATE® in allergic conjunctivitis, licensed in multiple
geographies, including to Harrow, Inc. in the U.S., and Ocumension
Therapeutics in the Chinese and in the majority of Southeast Asian
markets.
Nicox, headquartered in Sophia Antipolis,
France, is listed on Euronext Growth Paris (Ticker symbol: ALCOX)
and is part of the CAC Healthcare index.
For more information on Nicox, its products or pipeline, please
visit: www.nicox.com.
Analyst coverage
Bryan, Garnier & Co
Eric
Yoo Paris,
FranceH.C. Wainwright &
Co Yi
Chen New York,
U.S.
The views expressed by analysts in their
coverage of Nicox are those of the author and do not reflect the
views of Nicox. Additionally, the information contained in their
reports may not be correct or current. Nicox disavows any
obligation to correct or to update the information contained in
analyst reports.Contacts
NicoxGavin SpencerChief Executive Officer T +33
(0)4 97 24 53 00communications@nicox.com |
Media / InvestorsSophie BaumontCohesion Bureau+33
6 27 74 74 49sophie.baumont@cohesionbureau.com |
Forward-Looking Statements
The information contained in this document may
be modified without prior notice. This information includes
forward-looking statements. Such forward-looking statements are not
guarantees of future performance. These statements are based on
current expectations or beliefs of the management of Nicox S.A. and
are subject to a number of factors and uncertainties that could
cause actual results to differ materially from those described in
the forward-looking statements. Nicox S.A. and its affiliates,
directors, officers, employees, advisers or agents, do not
undertake, nor do they have any obligation, to provide updates or
to revise any forward-looking statements.
Risks factors which are likely to have a
material effect on Nicox’s business are presented in section 2.7 of
the “Rapport Annuel 2022” and in section 4 of the “Rapport
semestriel financier et d’activité 2023” which are available on
Nicox’s website (www.nicox.com).
Nicox S.A.Sundesk Sophia Antipolis, Bâtiment C,
Emerald Square, Rue Evariste Galois, 06410 Biot, FranceT +33 (0)4
97 24 53 00
1 BlackRock Inc. announced the completion of its acquisition of
Kreos, a leading provider of growth and venture debt financing to
companies in the technology and healthcare industries, on 2 August
2023.2 This figure is the contractual amount of the debt which is
different from that reported using IFRS accounting standards.
- EN - Nicox-BlackRock amendement PR _20240228_F
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