MISSISSAUGA, ON, Jan. 7, 2020 /CNW/ - Nuvo Pharmaceuticals Inc.
(Nuvo or the Company) (TSX:NRI; OTCQX:NRIFF), a Canadian focused
healthcare company with global reach and a diversified portfolio of
commercial products, today announced the Company will repay its
Bridge Loan to Deerfield Management Company, L.P. (Deerfield) during the second week of January
and will receive the full US$7.5
million annual minimum royalty payment due from the 2019
sales of Vimovo in the U.S. The Company has received
US$5.6 million to-date.
Bridge Loan to Deerfield
The US$6.0 million Bridge
Loan was one component of the financing provided by Deerfield in support of the acquisition of
Aralez Pharmaceuticals Canada, the U.S. and International
rights to Vimovo and other related assets as announced
on December 31, 2018. The Company
will repay its Bridge Loan (12.5% per annum) during the second week
of January, ahead of its June 2020
maturity date. The Company's remaining loans, US$52.5 million and US$60.0 million carry coupon interest rates of
3.5% per annum.
In June 2019, the Company announced its intention to reduce
annual operating expenses by approximately $7.0
million due to identified synergies and the implementation of
organizational changes. The Company began to realize these
synergies during the second half of 2019.
In June 2019, Deerfield and certain of its affiliated funds,
as lenders, and the Company agreed to an amendment to its
financing agreement to provide, among other things, for a payment
deferral mechanism in the event that Vimovo U.S. market exclusivity
is lost. The amendment will allow Nuvo the option to defer a
portion of the mandatory minimum quarterly prepayments by the
difference between one quarter of the existing US$7.5
million annual minimum royalty due from Vimovo sales in the
U.S. and the actual amount of royalties received in the applicable
quarter in the event Vimovo U.S. market exclusivity is lost earlier
than May 2022. The amount of any deferred prepayment would,
until repaid in accordance with the amendment, be subject to an
interest rate of 12.5% per annum.
Vimovo U.S. Royalty
As of December 31, 2019, no
generic version of Vimovo had been launched in the U.S. during 2019
and, as of the end of business on January 6,
2020, the U.S. Food and Drug Administration (FDA) had not
granted final approval for a generic version of Vimovo. As a
result, the Company is entitled to the US$7.5 million annual minimum royalty due
from the 2019 sales of Vimovo in the U.S., as per the agreement
with its U.S. commercial partner.
The Company had previously disclosed its assumption that a
generic version of Vimovo would be launched in the U.S. during the
second half of 2019. The Company anticipates a generic
version of Vimovo will launch in the U.S. during 2020. Upon
launch of a generic version of Vimovo in the U.S., Nuvo
Pharmaceuticals (Ireland) DAC's
(Nuvo Ireland) US$7.5 million annual
minimum royalty from its partner ceases. The royalty rate for
2020 would be calculated as 10% of net sales of Vimovo in the U.S.,
subject to certain step-down provisions upon achievement of generic
market share thresholds. A launch of a generic version of
Vimovo in the U.S. does not impact Nuvo Ireland's global Vimovo
business in markets outside of the U.S. Nuvo Ireland will
continue to receive royalty payments from its global partner,
Grunenthal GmbH on global net sales of Vimovo.
Any launch of a generic version of Vimovo in the U.S. is
considered "at risk" as Nuvo Ireland continues to hold U.S. Patent
Nos. 8,858,996 and 9,161,920 (the '996 and '920 patents) covering
Vimovo in the U.S. The '996 and '920 patents are currently
the subject of patent infringement litigation against Dr. Reddy's
Laboratories Inc. The parties have mutually agreed on a
pretrial litigation schedule with the U.S. District Court of
New Jersey through
to mid-2021. The term of the '996 and '920 patents
extends to May 31, 2022. Nuvo Ireland, with its
commercial partner, continue to work together to vigorously defend
these patents.
About Nuvo Pharmaceuticals Inc.
Nuvo (TSX: NRI; OTCQX:
NRIFF) is a Canadian focused, healthcare company with global reach
and a diversified portfolio of commercial products. The
Company targets several therapeutic areas, including pain, allergy
and dermatology. The Company's strategy is to in-license and
acquire growth-oriented, complementary products for Canadian and
international markets. Nuvo's head office is located in
Mississauga, Ontario, Canada, the
international operations are located in Dublin, Ireland and the U.S. Food and Drug
Administration (FDA), Health Canada and E.U. approved manufacturing
facility is located in Varennes,
Québec, Canada. The Varennes
facility operates in a Good Manufacturing Practices (GMP)
environment respecting the U.S, Canada and E.U. GMP regulations and is
regularly inspected by Health Canada and the FDA. For
additional information, please visit
www.nuvopharmaceuticals.com.
Forward-Looking Statements
This press release
contains "forward-looking information" as defined under Canadian
securities laws (collectively, "forward-looking statements"). The
words "plans", "expects", "does not expect", "goals", "seek",
"strategy", "future", "estimates", "intends", "anticipates", "does
not anticipate", "projected", "believes" or variations of such
words and phrases or statements to the effect that certain actions,
events or results "may", "will", "could", "would", "should",
"might", "likely", "occur", "be achieved" or "continue" and similar
expressions identify forward-looking statements. In addition, any
statements that refer to expectations, intentions, projections or
other characterizations of future events or circumstances contain
forward-looking statements.
Forward-looking statements are not historical facts but
instead represent management's expectations, estimates and
projections regarding future events or circumstances. Such
forward-looking statements are qualified in their entirety by the
inherent risks, uncertainties and changes in circumstances
surrounding future expectations which are difficult to predict and
many of which are beyond the control of the Company.
Forward-looking statements are necessarily based on a number of
estimates and assumptions that, while considered reasonable by
management of the Company as of the date of this press release, are
inherently subject to significant business, economic and
competitive uncertainties and contingencies. Material factors and
assumptions used to develop the forward-looking statements, and
material risk factors that could cause actual results to differ
materially from the forward-looking statements, include but are not
limited to, the validity of the '907 and '285 Patents claims, the
outcome of ongoing patent litigation and other factors, many of
which are beyond the control of Nuvo. Additional factors that
could cause Nuvo's actual results and financial condition to differ
materially from those indicated in the forward-looking statements
include, among others, the risk factors included in Nuvo's most
recent Annual Information Form dated March
28, 2019 under the heading "Risks Factors", and as described
from time to time in the reports and disclosure documents filed by
Nuvo with Canadian securities regulatory agencies and commissions.
These and other factors should be considered carefully and readers
should not place undue reliance on Nuvo's forward-looking
statements. When relying on forward-looking statements to make
decisions, the Company cautions readers not to place undue reliance
on these statements, as forward-looking statements involve
significant risks and uncertainties. Forward-looking statements
should not be read as guarantees of future performance or results
and will not necessarily be accurate indications of whether or not
the times at or by which such performance or results will be
achieved.
All forward-looking statements are based only on information
currently available to the Company and are made as of the date of
this press release. Except as expressly required by applicable
Canadian securities law, the Company assumes no obligation to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events or otherwise. All
forward-looking statements in this press release are qualified by
these cautionary statements.
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SOURCE Nuvo Pharmaceuticals Inc.