Santhera Secures Funding to Achieve Break-Even by 2026

Pratteln, Switzerland, August 13, 2024 – Santhera Pharmaceuticals has successfully completed two significant financing deals, securing gross funding of approximately CHF 69 million. This financial boost, combined with the company's existing cash reserves, is expected to support its growth plans, manage the repayment of maturing convertible bonds, and ensure liquidity until the first half of 2026. By then, Santhera anticipates achieving cash flow break-even.

The first financing agreement involved a term loan of CHF 35 million from Highbridge Capital Management, LLC. The loan has a four-year maturity term with an interest rate tied to the 3-month SARON plus 9.75%. Additionally, this agreement includes modifications to existing Highbridge private convertible bonds. Specifically, CHF 7 million with a strike price of CHF 10 has been extended by 12 months to August 2025, and CHF 4 million with a strike price of CHF 5 has been converted. New warrants have also been issued to Highbridge as part of this deal.

The second financing arrangement entails a USD 30 million royalty monetization agreement with R-Bridge. Upon closing, R-Bridge paid an upfront sum of USD 30 million to Santhera, with additional staged sales-related milestone payments that could total an extra USD 8 million if certain targets are met. This agreement allows Santhera to monetize 75% of its future royalty income streams from licensing deals for AGAMREE® with Catalyst Pharmaceuticals, Inc. and Sperogenix Therapeutics Ltd., specifically for net product sales from July 1, 2024. Once the predefined threshold or duration is reached, the North America and China royalty payments will revert back to Santhera. The company also retains specific rights to repurchase the royalty income stream.

Following these financing deals, Santhera's proforma cash balance stands at CHF 72 million as of August 13, 2024, after deducting transaction fees. Post repayment of maturing listed convertible bonds and interest totaling CHF 14 million, the remaining funds are expected to be sufficient to support the company's operations through to 2026.

Santhera Pharmaceuticals is a Swiss specialty pharmaceutical company that focuses on developing and commercializing innovative treatments for rare neuromuscular and pulmonary diseases with significant unmet medical needs. The company holds an exclusive global license from ReveraGen for AGAMREE® (vamorolone), a dissociative steroid known for its novel mode of action. AGAMREE® has been investigated as an alternative to standard corticosteroids in a pivotal study involving patients with Duchenne muscular dystrophy (DMD). It is approved for treating DMD by the FDA in the U.S., the EMA in the EU, and the MHRA in the UK. Santhera has out-licensed North American rights to AGAMREE® to Catalyst Pharmaceuticals, Inc. and Chinese rights to Sperogenix Therapeutics Ltd.

Santhera’s recent financial maneuvers not only ensure the company's short-term stability but also pave the way for its long-term growth and development in the field of rare diseases.

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