Novelion Therapeutics Inc.
(NASDAQ:NVLN)
(TSX:NVLN), a biopharmaceutical company dedicated to developing new
standards of care for individuals living with rare
diseases (the “Company”), today announced that on
December 3, 2016, Aegerion Pharmaceuticals, an indirect,
wholly-owned subsidiary
of Novelion, entered into an agreement in
principle to settle all claims in the class action
shareholder lawsuit pending in the United States District
Court for the District of Massachusetts (the “Class Action
Litigation”).
The agreement provides for an aggregate settlement payment
by or on behalf of Aegerion of $22.25 million. The Company expects
$22 million of the settlement will be funded by Aegerion’s
insurance proceeds and $250,000 will be funded by
Aegerion. The settlement would include the dismissal
of all claims against Aegerion and the named individuals in the
Class Action Litigation without any liability or wrongdoing
attributed to them. The settlement remains subject to
further documentation, court approval, and other customary
conditions, including Aegerion’s right to terminate the settlement
in the event an agreed upon percentage of class members do not
participate.
“We are encouraged by our continued execution
on yet another important strategic initiative,” said
Chief Executive Officer Mary Szela. “Under Novelion's new
management team, which has been significantly strengthened by
recent hires in key leadership positions, the Company’s
subsidiary, Aegerion, has now entered into an agreement in
principle to settle the Class Action
Litigation, demonstrably reduced its cost
structure, and stabilized its balance sheet via
the QLT merger.”
Novelion also announced plans to undertake a reverse stock split
of its common shares on the basis of a consolidation ration of one
for five (1:5) (the “Consolidation”).
The Consolidation is expected to take
effect on or about December 16, 2016.
The purpose of the Consolidation, which was approved by
Novelion's new board of directors, is to
increase the per share trading price of Novelion’s
common shares in order to eliminate non-fundamentally related
trading restrictions on many investors.
Ms. Szela continued, “The reverse stock split is
driven purely from a position of revitalized strength,
and aims to provide a compelling investment opportunity to a larger
breadth of institutional investors that may otherwise be prohibited
from investing in lower price-per-share equities.”
The Company will seek approval from the Toronto Stock
Exchange (“TSX”) to effect the Consolidation and has provided
notification of the Consolidation to NASDAQ.
Subject to TSX approval, every five common shares issued
and outstanding immediately prior to the effective date of
the Consolidation will
automatically convert into one common share. As a
result of the Consolidation, the approximate number
of issued and outstanding common shares will be reduced
from 92,653,562 to 18,530,712. Each shareholder’s
percentage ownership in the Company and proportional voting
power will remain unchanged after the Consolidation,
except for minor changes and adjustments resulting from the
treatment of fractional shares. No fractional shares will be
issued in connection with the Consolidation and any fractional
shares that would have otherwise been issued will be rounded down
to the nearest whole number, therefore no cash will be
received in lieu of fractional shares. Proportional
adjustments will be made to the Company’s outstanding stock
options, warrants and restricted stock units, as well
as to the conversion rate for the outstanding
convertible notes of the Company’s wholly-owned
subsidiary, Aegerion Pharmaceuticals.
About Novelion Therapeutics Inc.Novelion Therapeutics
is a biopharmaceutical company dedicated to developing new
standards of care for individuals living with rare diseases.
The Company seeks to advance its portfolio of rare
disease therapies by investing in science and clinical
development. Novelion has a diversified commercial
portfolio through its indirect subsidiary, Aegerion
Pharmaceuticals, Inc., which includes MYALEPT® and JUXTAPID®, and
is also developing zuretinol acetate for the treatment of
inherited retinal disease caused by underlying mutations in RPE65
or LRAT genes. Aegerion is planning to file a Marketing
Authorization Application in the EU in
December 2016 for metreleptin to treat
generalized lipodystrophy and a subset of partial
lipodystrophy. Aegerion recently received approval
for lomitapide in Japan and plans to launch in
January of 2017.
Forward-Looking Statements
Certain statements in this press release may constitute “forward
looking information” within the meaning of applicable
Canadian and United States securities laws. Forward looking
statements include statements regarding the Consolidation,
including the anticipated effective date, expectations about the
settlement of the Class Action Litigation and expectations about
insurance proceeds available for such settlement, plans
for filing for approval of metreleptin and plans to
launch Juxtapid in Japan. These statements are often, but
not always, made through the use of words or phrases such as
“believe,” “expect,” “anticipate,” “should,” “planned,” “will,”
“may,” “intend,” “would,” “could,” and “potential,” and similar
expressions. All such forward looking statements involve
assumptions that, although believed to be reasonable based on
information currently available to management, are subject to
risks, uncertainties and other factors that could cause actual
results to differ materially from the results expressed in the
statements. You should not place undue reliance on any such
forward-looking statements. Among the key factors that could cause
actual results to differ materially from those projected in the
forward-looking statements are the timing to effect the
Consolidation and the potential that regulatory approvals for
the Consolidation will not be received within the expected time
frames; the terms of the agreement in principle related to the
Class Action Litigation, including the payment amount and
availability of insurance, could be amended and the amount and
terms of any final settlement may be substantially higher and less
favorable than we anticipate based on the terms of the preliminary
agreement in principle.; the possibility that the court
may materially alter or fail to approve the terms of
the Class Action Litigation; the possibility that
the anticipated benefits and synergies from the proposed merger
cannot be fully realized or may take longer to realize than
expected; the possibility that costs or difficulties related to the
integration of Aegerion and QLT operations will be greater than
expected; the risk that market acceptance
of lomitapide and metreleptin in Japan and
Europe, respectively, may be lower than we expect; the risk
that the conversion of prescriptions for JUXTAPID or MYALEPT into
patients on therapy may be lower than we expect or the drop-out
rate may be higher than we expect; the risk that the prevalence of
the diseases Aegerion's products treat, or that we are pursuing
treatment for, may be lower than we estimate, and that it may be
more difficult to identify patients than we expect; the risk that
the side effect profile or other results for Aegerion's products in
commercial use and in further clinical studies are inconsistent, in
scope and severity, with the side effect profile and other results
observed in the pivotal study of each drug; the risk that the
negative impact of the launch of PCSK9 inhibitors on JUXTAPID sales
will be greater than we currently expect, particularly in the U.S.,
where the negative impact has been greater than we expected to
date, or that other competitive products will negatively impact our
results; the risk that private or government payers may refuse to
reimburse Aegerion's or our products, or may impose onerous
restrictions that hinder reimbursement or significantly limit or
cap the price Aegerion or we charge or the number of reimbursed
patients who receive products; the risk that revisions to the
JUXTAPID Risk Evaluation and Mitigation Strategies (REMS) Program
may negatively impact U.S. sales; the risk that Aegerion’s business
may be negatively impacted if there are more Medicaid patients
prescribed MYALEPT than we expect; the risk that named patient
sales in Brazil and other key countries outside the U.S. may not be
at the levels we expect; the risk that regulatory authorities in
regions or countries where either of Aegerion's products is not yet
approved may refuse to approve such products or additional
indications for such products, such approvals are not made on a
timely basis or such approvals impose significant restrictions or
require additional development; the risk that exchange rates will
negatively impact the amount of net product sales recognized; the
risk that the initiation of future clinical trials may be delayed;
the risk that we will not be successful in our lifecycle management
or business development efforts; the risk that Aegerion's and our
patent portfolios and marketing and data exclusivity may not be as
strong as we anticipate; the risk of unexpected manufacturing
issues affecting future supply; the risk that Aegerion incurs more
costs than we expect in responding to investigations, defending
litigation and resolving litigation; the risk that any of the
foregoing may cause product sales revenue to be lower than we
expect, or that we may incur unanticipated expenses in connection
with our activities; the risk that we may not be able to
successfully execute strategic plans, including our cost-reduction
program; and the other risks inherent in the commercialization,
drug development and regulatory approval process. In addition,
Aegerion's agreement in principle with the U.S. Department of
justice ("DOJ") and the U.S. Securities and Exchange Commission
("SEC") relating to the investigations by these agencies and the
terms of potential final settlements with these agencies include
risks associated with the required approvals of final
settlement terms by relevant government agencies, such as the
proposed settlement with the DOJ being subject to approval of
supervisory personnel within the DOJ and relevant federal and state
agencies and approval by a U.S. District Court judge of the
criminal plea and sentence and the civil settlement agreement, and
the proposed settlement with the SEC being subject to review by
other groups in the SEC and approval by the Commissioners of the
SEC. The terms of the preliminary agreements in principle may
change following further negotiations. The amount and terms
of any final settlement may be substantially higher and less
favorable than we anticipate based on the terms of the preliminary
agreements in principle. Final settlement terms could include
the imposition of additional penalties, further limiting Aegerion's
ability to conduct its business as currently conducted and as
planned to be conducted. Additionally, the DOJ and the SEC each
likely will outline their views of the factual background in
connection with any final settlement. The government's
recitation of their assessment of the background could lead to
additional legal claims or investigations by state government
entities or private parties and may have adverse effects on the
Class Action Litigation, commercial operations and
contracts. For additional disclosure regarding these and
other risks we face, see the disclosure contained in the "Risk
Factors" section of Aegerion's Quarterly Report on Form 10-Q filed
on November 4, 2016, QLT's Annual Report on Form 10-K filed on
February 25, 2016 (and amended on April 29, 2016) and Quarterly
Report on Form 10-Q filed on November 1, 2016 and each company's
other public filings with the SEC, available on the SEC's website
at http://www.sec.gov. We undertake no obligation to update or
revise the information contained in this press release, whether as
a result of new information, future events or circumstances or
otherwise, except as required by law.
Investors and others should note that we communicate with our
investors and the public using www.novelion.com, including, but not
limited to, company disclosures, investor presentations and FAQs,
SEC filings, press releases, public conference calls transcripts
and webcast transcripts. The information that we post on these
websites could be deemed to be material information. As a result,
we encourage investors, the media and others interested to review
the information that we post there on a regular basis. The contents
of our website shall not be deemed incorporated by reference
in this release or any filing under the Securities Act of
1933, as amended.
CONTACT:
Amanda Murphy, Associate Director, Investor & Public Relations
Aegerion Pharmaceuticals, a Subsidiary of Novelion
857-242-5024
Amanda.murphy@aegerion.com
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