(Boursier.com) — GenSight Biologicsa biopharmaceutical company dedicated to the development and commercialization of innovative gene therapies for neurodegenerative diseases of the retina and central nervous system, announced today that it has signed a subscription agreement for an amount of 12 million euros in the form a bond issue convertible into shares with Heights Capital.
“A few weeks after the announcement of a conditional loan of 35 million by the EIB, this new financing with Heights Capital will allow us not only to draw the first tranche of 8 million euros, but also to secure an additional 12 million in conditions that are once again not very dilutive for our shareholders, despite particularly difficult market conditions”, declared Thomas Gidoin, Chief Financial Officer of GenSight. “These bonds are convertible with a premium of 30% on the current price, and redeemable in shares with a maximum discount of 15% on the current price, with the possibility of redeeming in cash. These conversion conditions greatly limit the risk of dilution for the shareholders”.
Reasons for issuance and use of proceeds of issuance
The gross proceeds of the operation will amount to 12 million euros.
The net proceeds of the issue, amounting to €10.8 million, will be used by the company to (i) repay the balance of the bond financing concluded with Kreos Capital VI (UK) Limited (“Kreos”) amounting to 4.4 million (including 3.9 million euros in principal), as well as to (ii) develop its portfolio of gene therapy products for the treatment of neurodegenerative diseases of the retina and central nervous system, and in particular LUMEVOQ until its possible marketing in Europe, scheduled for the end of 2023.
In accordance with the financing agreement entered into with the European Investment Bank on 3 November 20221, the disbursement of the first tranche of 8 million euros by the EIB for the benefit of the Company (the “Tranche A”) is subject, among other terms :
the conclusion of an agreement to issue share subscription warrants with the EIB,
the issue of the Warrants relating to Tranche A,
the full repayment of the balance of the financing with Kreos in the amount of 4.4 million (including 3.9 million euros in principal),
the successful production of a pilot batch of LUMEVOQ (condition fulfilled on September 19, 20222),
the Company’s decision to launch the validation batch production campaign (PPQ) (condition fulfilled), and
a cash contribution of 10 million euros, in the form of equity, convertible bonds (insofar as their repayment would be subordinated to the EIB’s debt under the conditions provided for in a subordination agreement to be concluded) or licensing revenue.
Upon settlement-delivery of the Financing, the Company will have fulfilled this last cash contribution condition.
The company also announces that it has entered into the Warrant Agreement providing for the issue of BSA for the benefit of the EIB, in accordance with Article L. 225-138 of the Commercial Code, the number of which will vary depending on the tranche and the price of exercise according to the market conditions applicable at the time of issue (the exercise price for each BSA will be equal to 95% of the volume-weighted average of the company’s ordinary share price over the last five trading days preceding the decision of the competent body of the Company to issue these warrants).
These BSAs will only be exercisable under the conditions described in the press release published by the company on November 4, 20223. If Tranche A of the BSAs were issued today under the conditions currently proposed, the potential dilution represented by the shares would be underlyings, would be approximately 2.49% of the current share capital of the Company.
In order to benefit from the disbursement of Tranche A in the amount of €8 million, the following conditions must be met by the company:
issue of the first tranche of BSA for the benefit of the EIB, scheduled for January 2023, and
full repayment of the balance of the financing with Kreos in the amount of 4.4 million (including 3.9 million euros in principal), expected before the end of 2022.