WAYNE, Pa., Aug. 31, 2016 /PRNewswire/ -- Egalet
Corporation (Nasdaq: EGLT) ("Egalet"), a fully integrated specialty
pharmaceutical company focused on developing, manufacturing and
commercializing innovative treatments for pain and other
conditions, today announced the completion of a secured debt
offering of $40 million. Egalet plans
to use the net proceeds from this transaction to repay all
outstanding obligations to Hercules Capital, Inc. under its
existing loan agreement, to support the approval and planned
commercialization of ARYMO™ ER (Morphine Sulfate) extended-release
tablets, an abuse-deterrent morphine, to support the development of
Egalet-002, an abuse-deterrent, extended-release oxycodone, and for
general corporate purposes. Morgan Stanley & Co. LLC acted as
sole placement agent for the transaction.
Egalet received $40 million
(before expenses) at the close of the transaction, and will receive
an additional $40 million upon
approval from the U.S. Food and Drug Administration (FDA) of ARYMO
ER, if such approval is obtained on or before June 30, 2017. The notes bear interest at a rate
of 13% per annum, paid semi-annually on March 20 and September
20 of each year, commencing on March
20, 2017. On each payment date, commencing on March 20, 2018, Egalet will pay an installment of
principal of the notes pursuant to a straight-line fixed
amortization schedule. However, if ARYMO ER is approved on or
before June 30, 2017, in lieu of the
straight-line fixed amortization schedule, on each payment date,
commencing on March 20, 2018, Egalet
will pay an installment of principal of the notes in an amount
equal to 15% of the aggregate net sales of OXAYDO®
(oxycodone HCI, USP) tablets for oral use only –CII,
SPRIX® (ketorolac tromethamine) Nasal Spray, ARYMO ER
and Egalet-002, less the amount of interest paid on the notes on
such payment date. The stated maturity date of the notes is
March 20, 2020, unless ARYMO ER is
approved by the FDA on or before June 30,
2017, in which case the date will be September 20, 2033. The notes are redeemable
at the option of Egalet at a redemption price which includes a
make-whole premium until August 30,
2018 and, thereafter, at a redemption price that includes a
declining premium to par over four years. The notes are secured by
substantially all of the property and assets (subject to certain
exclusions) of Egalet Corporation and its subsidiaries.
Additionally, Egalet has sold a royalty right to the note
purchasers, representing a right to receive an aggregate 1.5%
royalty payment on net sales of SPRIX and OXAYDO. If ARYMO ER
is approved by the FDA on or before June 30,
2017, in connection with the issuance of the second tranche
of notes, Egalet will sell a royalty right to the note purchasers,
representing a right to receive an aggregate 1.5% royalty payment
on net sales of ARYMO ER. The royalty will be paid
semi-annually, on the same dates as the notes and will be paid
until December 31, 2019 unless ARYMO
ER is approved by the FDA on or before June
30, 2017, in which case, December
31, 2020.
"This non-dilutive financing puts us in a good position to bring
ARYMO ER through FDA approval and if approved commercial launch, to
complete Egalet-002 late-stage development and to conduct
additional research and development of other compounds employing
our proprietary Guardian™ Technology," said Bob Radie, president and chief executive officer
of Egalet. "This financing combined with our existing cash on hand,
SPRIX and OXAYDO product sales, and potential ARYMO sales, could
take us to break even."
For more information regarding the terms and conditions of the
notes, please refer to the current report on form 8-K filed today
by Egalet with the Securities and Exchange Commission.
This announcement is neither an offer to sell, nor a
solicitation of an offer to buy, any of these securities and shall
not constitute an offer, solicitation or sale in any jurisdiction
in which such offer, solicitation or sale is unlawful. The notes
have not been and will not be registered under the Securities Act
of 1933 or any state securities laws, and unless so registered, may
not be offered or sold in the United
States except pursuant to an exemption from the registration
requirements of the Securities Act of 1933 and applicable state
securities laws.
About Egalet
Egalet, a fully integrated specialty
pharmaceutical company, is focused on developing, manufacturing and
commercializing innovative treatments for pain and other
conditions. Egalet has two approved products: OXAYDO® (oxycodone
HCI, USP) tablets for oral use only –CII and SPRIX® (ketorolac
tromethamine) Nasal Spray. In addition, using its proprietary
Guardian Technology, Egalet is developing a pipeline of
clinical-stage, product candidates that are specifically designed
to deter abuse by physical and chemical manipulation. The lead
programs, ARYMO™ ER, an abuse-deterrent, extended-release, oral
morphine formulation, and Egalet-002, an abuse-deterrent,
extended-release, oral oxycodone formulation, are being developed
for the management of pain severe enough to require daily,
around-the-clock, long-term opioid treatment and for which
alternative treatment options are inadequate. Egalet's Guardian™
Technology can be applied broadly across different classes of
pharmaceutical products and can be used to develop combination
products that include multiple active pharmaceutical ingredients
with similar or different release profiles. For additional
information on Egalet, please visit egalet.com. For full
prescribing information on SPRIX, including the boxed warning,
please visit sprix.com. For full prescribing information on OXAYDO,
please visit oxaydo.com.
Safe Harbor
Statements included in this press release
(including but not limited to anticipated labeling for ARYMO ER)
that are not historical in nature are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements, which include statements
about how the financing impacts Egalet's financial position and
potential ability to get to break-even, are based on management's
current expectations, and are subject to known and unknown
uncertainties and risks. Actual results could differ materially
from those discussed due to a number of factors, including, but not
limited to: the success of Egalet's clinical trials, including the
timely recruitment of trial subjects and meeting the timelines
therefor; Egalet's ability to obtain regulatory approval of its
product candidates; Egalet's ability to maintain the intellectual
property position of its products and product candidates; Egalet's
ability to identify and reliance upon qualified third parties to
manufacture its products; Egalet's ability to service its debt
obligations and manage its expenses; Egalet's ability to raise
additional funds related to execute its business plan and growth
strategy in terms acceptable to Egalet, if at all; Egalet's ability
to find and hire qualified sales professionals; the receptivity in
the marketplace and among physicians to Egalet's products; the
success of products which compete with Egalet's that are or become
available; general market conditions; and other risk factors
described in Egalet's filings with the United States Securities and
Exchange Commission. Egalet assumes no obligation to update or
revise any forward-looking-statements contained in this press
release whether as a result of new information or future events,
except as may be required by law.
Investor and Media Contact:
E. Blair Clark-Schoeb
Senior Vice President, Communications
Email: bcs@egalet.com
Tel: 917-432-9275
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SOURCE Egalet Corporation