Oncobiologics, Inc. (NASDAQ:ONS) today announced that it entered
into a Purchase Agreement on September 7, 2017 with GMS Tenshi
Holdings Pte. Limited (“GMS Tenshi”), providing for the private
placement of up to $25.0 million of Oncobiologics’ Series A
Convertible Preferred Stock (“Series A”), as well as warrants to
acquire up to an additional 16,750,000 shares of its common stock
(the “Warrants”) having an aggregate exercise price of
approximately $15 million.
In connection with the entry into the Purchase
Agreement, Oncobiologics and GMS Tenshi also entered into a Joint
Development and License Agreement (the “License”), providing for
the license to GMS Tenshi of rights to ONS-3010 (HUMIRA®
biosimilar) and ONS-1045 (AVASTIN® biosimilar) in emerging markets,
excluding China, India and Mexico. The License supersedes and
replaces a previous strategic license agreement entered into on
July 25, 2017 with GMS Tenshi, which licensed only ONS-1045, and
which resulted in payments totaling $2.5 million in up-front and
milestone fees to Oncobiologics. The License includes an
aggregate $2.5 million of additional upfront payments due in part
at signing and upon initial closing of the sale of Series A under
the Purchase Agreement, as well as potential additional milestones
of up to $5.0 million and a net profit share.
Oncobiologics has also entered into an agreement
with an existing investor and holder of senior secured notes of
Oncobiologics to exchange $1.5 million of its senior secured notes
for non-voting Series B Convertible Preferred Stock and forgive the
unpaid interest on such exchanged notes.
Oncobiologics Chairman and CEO, Pankaj Mohan,
Ph.D., commented, “This investment by GMS Tenshi represents the
culmination of our efforts to align with a strategic financial
partner with a global strategy to accelerate commercialization of
our biosimilar candidates and enhance our partnering and licensing
capabilities. The principals of GMS Tenshi are
internationally known biopharma entrepreneurs with the know-how to
rapidly deliver critically needed biosimilars to emerging markets
around the globe. We believe that we now have a partner with
the necessary financial and global commercial pharmaceutical
expertise that, when combined with our unique BioSymphony™
Platform, will allow us to realize our vision to bring affordable
biologic drugs to patients in need around the world.”
Oncobiologics intends to use the net proceeds
from the private placement primarily for the initiation of Phase 3
clinical trials for its lead biosimilar candidate, ONS-3010, and
for working capital and general corporate purposes. ONS-3010
has successfully completed Phase 1 clinical trials and is preparing
to enter Phase 3 in 2018. Oncobiologics is developing ONS-3010 as a
differentiated HUMIRA® biosimilar with a unique formulation and an
innovative Phase 3 clinical program designed to prove biosimilarity
to, and interchangeability with, HUMIRA® in a single study
population.
GMS Tenshi is a Singapore based joint-venture
between Tenshi Life Sciences Private Limited – the private
investment vehicle of Arun Kumar, and GMS Holdings, a private
investment company headquartered in Amman, Jordan owning a
portfolio of diversified businesses globally. Arun Kumar is
the founder of the Strides Group of companies, including
India-based pharmaceutical company Strides Arcolab Limited
(currently Strides Shasun Limited) and Stelis Biopharma Limited, a
company engaged in the development of biotherapeutic drugs
(including biosimilars). GMS Holdings is a founder and major
shareholder in MS Pharma, a leading branded generics company in the
Middle East and North Africa region. In the United States,
GMS Holdings was a co-founder of and majority shareholder in
Alvogen, Inc. a specialty generic pharmaceutical company, which it
sold in 2014. Together with Strides Shasun and Tenshi Life
Sciences, GMS Holdings is a strategic investor in Stelis
Biopharma.
A statement issued by GMS Tenshi noted, “We
believe that bringing affordable biosimilars to emerging markets
where they are so desperately needed is of critical importance to
global healthcare. As pharma specialists, we also recognize
the technical challenges in developing and manufacturing complex
biologics, and we saw that the Oncobiologics team and its
BioSymphony™ Platform offered the scientific and engineering
capabilities required to accomplish this. GMS Tenshi is excited to
invest in Oncobiologics to accelerate the commercialization of its
flagship biosimilar product candidates (namely ONS-3010 and
ONS-1045), as well as other pipeline and new product candidates.
Our objective is to help Oncobiologics prepare ONS-3010 so that it
can be launched alongside other first-wave HUMIRA® biosimilars
with potentially improved tolerability compared to the originator
product as reported in the successful Phase 1 trial.”
Under the Purchase Agreement, Oncobiologics will
initially sell 32,628 shares of its Series A to GMS Tenshi for
approximately $3.3 million of cash upon satisfaction of certain
initial closing conditions, and enter into an Investor Rights
Agreement in connection therewith. Under the Investor Rights
Agreement, Oncobiologics will grant GMS Tenshi certain registration
rights with respect to the shares of its common stock issuable upon
conversion of the Series A and exercise of the Warrants. Effective
upon the closing of the initial sale of Series A to GMS Tenshi,
Oncobiologics’ Board also will elect Faisal G. Sukhtian and Joe
Thomas, each of whom will be designated by GMS Tenshi under the
Investor Rights Agreement, to its Board of Directors, which
individuals will fill vacancies on the Board created by the
resignations of Robin Smith Hoke and Donald J. Griffith, which will
also be effective as of the closing of the initial sale of Series A
to GMS Tenshi. Oncobiologics also entered into an Exchange
and Purchase Agreement on September 7, 2017 with an existing
investor and agreed to exchange $1.5 million aggregate principal
amount of the outstanding senior secured notes held by such
investor for 1,500,000 of Oncobiologics’ non-voting, Series B
Convertible Preferred Stock (“Series B”) concurrent with the
issuance of the remaining 217,372 shares of Series A.
Oncobiologics and the holders of its senior secured notes also
agreed to amend the terms of such notes to extend the maturity date
by 12 months, among other items.
The closing of the sale of the additional
217,372 remaining shares of Series A and the Warrants is subject to
a number of additional closing conditions, including receipt of
stockholder approval and other customary closing conditions. Under
the Investor Rights Agreement, GMS Tenshi will have the right to
designate up to two additional directors in connection with the
closing of the sale of such remaining securities. Oncobiologics
will also grant GMS Tenshi certain information rights, a right of
first offer over certain future issuances of securities, as well as
a right of participation in certain future securities issuances.
In the event that the final closing does not occur,
Oncobiologics has agreed to pay GMS Tenshi, under certain
circumstances, $12.5 million in liquidated damages in addition to
other expenses, and GMS Tenshi will have a right to put all of the
Series A purchased at the initial closing to
Oncobiologics.
Oncobiologics intends to file a proxy statement
with the U.S. Securities and Exchange Commission for its Annual
Meeting of Stockholders, pursuant to which it will seek stockholder
approval of the issuance of the Series A and Warrants to GMS
Tenshi, change of control of Oncobiologics, along with election of
directors and other items to be set forth therein.
This news release shall not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any sale of
these securities in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful, prior to registration or
qualification under the securities laws of any such state or
jurisdiction.
About Oncobiologics, Inc. and its
BioSymphony™ PlatformOncobiologics is a clinical-stage
biopharmaceutical company focused on identifying, developing,
manufacturing and commercializing complex biosimilar therapeutics.
Its current focus is on technically challenging and commercially
attractive monoclonal antibodies (mAbs) in the disease areas of
immunology and oncology. Oncobiologics is advancing its pipeline of
biosimilar products, two of which are currently in clinical
development. Led by a team of biopharmaceutical experts,
Oncobiologics operates from an in-house state-of-the-art fully
integrated research and development, and manufacturing facility in
Cranbury, New Jersey. Oncobiologics employs its BioSymphony™
Platform to address the challenges of biosimilar development and
commercialization by developing high quality mAb biosimilars in an
efficient and cost-effective manner on an accelerated timeline. For
more information, please visit www.oncobiologics.com.
Forward-Looking StatementsThis
press release contains forward-looking statements. All
statements other than statements of historical facts are
“forward-looking statements,” including those relating to future
events. In some cases, you can identify forward-looking statements
by terminology such as “may,” “might,” “will,” “should,” “expect,”
“plan,” “anticipate,” “project,” “believe,” “estimate,” “predict,”
“potential,” “intend” or “continue,” the negative of terms like
these or other comparable terminology, and other words or terms of
similar meaning. These include statements about whether or
not the closing of the sale of the Series A and Warrants to GMS
Tenshi will occur, our ability to receive potential additional
upfront and milestone payments under the License Agreement, the
effects of partnering with GMS Tenshi on our ability to continue
development of, and potentially commercialize, our biosimilar
product candidates, and the exchange of senior secured notes for
Series B, among others. Although we believe that we have a
reasonable basis for forward-looking statements contained herein,
we caution you that they are based on current expectations about
future events affecting us and are subject to risks, uncertainties
and factors relating to our operations and business environment,
all of which are difficult to predict and many of which are beyond
our control. Therefore, they may cause our actual results to differ
materially from those expressed or implied by forward-looking
statements in this presentation. All forward-looking statements
included in this press release are expressly qualified in their
entirety by the foregoing cautionary statements. You are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. We do not undertake any
obligation to update, amend or clarify these forward-looking
statements whether as a result of new information, future events or
otherwise, except as may be required under applicable securities
law.
CONTACTS:
Oncobiologics:
Lawrence A. Kenyon
Chief Financial Officer
LawrenceKenyon@oncobiologics.com
Media & Investors:
Alex Fudukidis
Russo Partners, LLC
alex.fudukidis@russopartnersllc.com
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