Agenus Inc. Completes $115 Million Non-Dilutive Royalty Transaction with Oberland Capital
September 09 2015 - 7:00AM
Business Wire
Agenus Inc. (NASDAQ: AGEN), an immunology company discovering
and developing innovative treatments for cancers and other
diseases, today announced a $115 million non-dilutive royalty
transaction pursuant to a Note Purchase Agreement with an investor
group led by Oberland Capital Management, LLC (Oberland Capital).
Agenus intends to use the proceeds from this transaction to advance
its immuno-oncology programs.
In return for $100 million at closing to Agenus, Oberland
Capital will have the right to receive 100% of Agenus’ rights to
the worldwide royalties on sales of GlaxoSmithKline’s (GSK)
shingles (HZ/su) and malaria (RTS,S) prophylactic vaccine products
that contain QS-21 adjuvant until all principal and interest on the
loan has been paid.
At its option, Agenus will receive an additional $15 million in
cash after approval of HZ/su by the Food and Drug Administration
(FDA), provided such approval does not occur later than June 30,
2018. Also at its option, Agenus has the right to buy back the loan
at any time under pre-specified terms.
“This financing allows us to monetize a significant share of the
value of our QS-21 platform while allowing us to retain any upside
remaining after the loan terms are satisfied. This transaction will
provide non-dilutive funding towards executing on our strategic and
operational goals,” said Dr. Garo Armen, Ph.D., Chairman and Chief
Executive Officer of Agenus.
C. Evan Ballantyne, Chief Financial Officer of Agenus, stated,
“This is an innovative financing structure that strengthens Agenus’
balance sheet considerably. With these additional funds we are well
positioned to advance our robust pipeline.”
The notes issued under the Note Purchase Agreement will accrue
interest at a rate of 13.5% per annum, compounded quarterly.
Principal and interest payments will only be made from the
royalties paid by GSK on the HZ/su and RTS,S vaccines. If the
royalty payments made by the earlier of (i) the end of the 12th
year or (ii) ten years after the first commercial sale in a major
market (the make whole date) are less than the initial principal
amount of the notes, Agenus will owe a “make whole” payment equal
to the difference between the principal amount and any such royalty
payments made through the make whole date. The loan is generally
limited recourse and secured only by the future royalties on the
HZ/su and RTS,S vaccines. If and when all principal and interest on
the notes have been repaid, 100% of the remaining GSK royalty
payments will revert back to Agenus.
Immediately prior to executing the Note Purchase Agreement with
Oberland Capital, Agenus re-purchased from Ingalls & Snyder
Value Partners L.P. and Arthur Koenig (Ingalls) their rights to
receive 20% of all of the GSK royalties for $20 million in cash,
plus 300,000 shares of Agenus common stock. Ingalls has no further
interest in any royalties associated with products containing
QS-21.
The initial $100 million cash payment is expected to yield net
cash proceeds of approximately $78 million to Agenus, inclusive of
the $20 million payment to Ingalls. As of June 30, 2015, Agenus
reported $139.6 million in cash, cash equivalents and short-term
investments.
Exigo Capital Corp. and the Kratos Group, LLC acted as financial
advisors to Agenus in connection with the transaction. Goodwin
Procter LLP acted as special counsel to Agenus, and Cooley LLP
acted as legal counsel to Oberland Capital.
About Oberland Capital
Oberland Capital is an investment firm focused on the healthcare
industry specializing in flexible, non-dilutive investment
structures customized to meet the specific capital requirements and
strategic objectives of transaction partners globally. The firm
offers a broad suite of financing solutions including the
monetization of royalty streams, acquisition of future product
revenues, creation of project-based financing structures, and
investment in debt and equity securities. The firm was founded
by Jean-Pierre Naegeli and Andrew
Rubinstein. For more information, please
visit oberlandcapital.com.
About Agenus
Agenus is an immunology company engaged in the discovery and
development of novel checkpoint modulators, vaccines and adjuvants
to treat cancer and other diseases. Using its proprietary platforms
Retrocyte Display™ and SECANT®, the Company is discovering and
developing novel antibodies to target GITR, OX40, CTLA-4, LAG-3,
TIM-3, PD-1, CEACAM1 and other undisclosed checkpoints in partnered
and internal programs. Agenus’ heat shock protein vaccine,
Prophage, has successfully completed Phase 2 studies in newly
diagnosed glioblastoma multiforme. The Company’s QS-21 Stimulon®
adjuvant is partnered with GlaxoSmithKline and Janssen Sciences
Ireland UC. For more information, please
visit www.agenusbio.com, or follow the company on Twitter
@Agenus_Bio; information that may be important to investors will be
routinely posted in these locations.
Forward-Looking Statements
This press release contains forward-looking statements that are
made pursuant to the safe harbor provisions of the federal
securities laws, including statements regarding the terms of the
Note Purchase Agreement, including the Company’s ability to receive
an additional $15.0 million if and when GSK’s shingles vaccine is
approved by the FDA, if ever, the potential obligation of the
Company to make a “make whole” payment, the Company’s intended use
of proceeds from the transaction, the potential for the royalty
stream to revert back to the Company, and the Company’s anticipated
net proceeds from the transaction. These forward-looking statements
are subject to risks and uncertainties that could cause actual
results to differ materially. These risks and uncertainties
include, among others, the risk that the shingles (HZ/su) or
malaria (RTS,S) vaccines may not receive marketing approval such
that royalties could be payable by GSK or that, even if either or
both of the shingles (HZ/su) and malaria (RTS,S) vaccines are
approved, GSK will successfully generate sales thereof, as well as
other factors described under the Risk Factors section of Agenus’
Form 10-Q filed with the Securities and Exchange Commission on
August 3, 2015. Agenus cautions investors not to place considerable
reliance on the forward-looking statements contained in this
release. These statements speak only as of the date of this press
release, and Agenus undertakes no obligation to update or revise
the statements, other than to the extent required by law. All
forward-looking statements are expressly qualified in their
entirety by this cautionary statement.
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version on businesswire.com: http://www.businesswire.com/news/home/20150909005312/en/
Media:BMC CommunicationsBrad Miles,
646-513-3125bmiles@bmccommunications.comorInvestors:Argot
PartnersAndrea Rabney, 212-600-1902andrea@argotpartners.comorJamie
Maarten, 212-600-1902jamie@argotpartners.com
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