Novelion Therapeutics Subsidiary Enters Into Term Loan Agreement and Novelion Provides Business Update
- New Aegerion loan facility, provided by existing bondholders, strengthens balance sheet and is expected to provide bridge to a potential comprehensive long-term capital restructuring
- Company expects to achieve positive cash flow at Aegerion level by 2Q 2019 on full-year net product sales of between
- Financial advisors retained to advise on strategic process and capital structure review
The facility consists of
Aegerion has engaged
The new facility has a maturity date of
The new facility was unanimously approved by the members of the board of directors of Novelion, all of whom are independent, and a special committee of Aegerion’s board of directors, comprised solely of independent directors, each of which received advice from separate legal and financial advisors.
- Novelion expects total net product sales in 2018 to be between
$130and $140 millionand total net product sales in 2019 to be between $145and $160 million, with blended cash gross margins of approximately 80% when adjusted for certain non-cash items, such as amortization of intangible assets and inventory fair value step up (non-GAAP). Following the operational expense cuts announced in August 2018, including a 36% reduction in workforce which included open or on-hold positions, Novelion expects Aegerion to achieve positive cash flow by the second quarter of 2019, and positive EBITDA in 2019, in each case, excluding any restructuring charges and when adjusted for certain non-cash items, such as amortization of intangible assets and debt discount and inventory fair value step up.
- As of
September 30, 2018, Novelion had approximately $27.4 millionin cash on a consolidated basis, including $13.7 millionat Novelion and $13.7 millionat the Aegerion subsidiary level. After giving effect to the consummation of the new secured financing by Aegerion as described above and the application of proceeds from such financing and the payment of related fees and expenses, Novelion and Aegerion are anticipated to have approximately $15.7 millionand $37.5 million, respectively, of cash as of November 8, 2018.
- Aegerion plans to engage in dialogue with the
U.S. Food and Drug Administration(FDA) on a potential metreleptin sBLA filing for PL in the U.S.
July 2018, the European Commission(EC) granted marketing authorization for MYALEPTA (metreleptin). MYALEPTA is the first and only licensed treatment in Europeindicated as an adjunct to diet as a replacement therapy to treat the complications of leptin deficiency in LD patients (which includes GL and PL). Aegerion is pursuing pricing and reimbursement negotiations with healthcare authorities on a country-by-country basis.
- Currently there are approximately 100 patients being treated through expanded access programs and named patient sales in
Europe, the substantial majority of which have GL or PL. Upon, and subject to, receipt of reimbursement approvals, Aegerion plans to convert patients to commercial therapy, where possible.
- Metreleptin is also currently being sold in certain Latin American countries via the named patient supply process, where allowed, and Aegerion intends to pursue additional marketing approvals for GL and PL in certain countries, including
Brazil, in 2019. The Latin American markets represent a potential growth opportunity, with a number of GL and PL patients already identified.
- Aegerion continues to expect growth in
Japan, where there are approximately 46 homozygous familial hypercholesterolemia (HoFH) patients on therapy, and more than 200 HoFH patients registered in the List of Intractable Diseases.
- Aegerion has filed for marketing authorization in
Brazilfor HoFH in August 2018and anticipates approval in the first half of 2019. In addition, we are currently preparing for commercial launch in Argentina, where JUXTAPID has been approved. In the meantime, Aegerion continues to provide therapy to HoFH patients via the named patient supply process, where allowed.
Research and Clinical Development Update
- Aegerion is evaluating the possibility of developing lomitapide for the potential treatment of familial chylomicronemia syndrome (FCS) given recent developments in the
FCSmarket. FCS is a rare genetic disease that Aegerion believes affects approximately one to two individuals per million. In 2011, the FDA granted Orphan Drug Designation to lomitapide for the treatment of FCS, and in 2012, the FDA indicated support of a potential filing based on a single Phase 3 placebo-controlled study. Aegerion plans to re-engage with FDA on a proposed development plan for FCS.
- Aegerion also believes there may be an opportunity to develop lomitapide for the treatment of severe heterozygous familial hypercholesterolemia (HeFH). JUXTAPID is currently only indicated as an adjunct therapy for HoFH.
- Metreleptin has potential clinical utility across a wide range of indications associated with hypoleptinemic metabolic disorder (HMD), including low-leptin obesity, hypoleptinemic nonalcoholic steatohepatitis (PL NASH), and infertility associated with hypothalamic amenorrhea. HMD is a spectrum of metabolic sequelae secondary to underlying leptin deficiency. HMD patients differ from epidemic “lifestyle” diseases such as common obesity, type 2 diabetes mellitus/insulin resistance and dyslipidemia, in that low leptin is the driver of the metabolic dysfunction.
- Clinical data from a metreleptin study assessing weight loss in overweight and obese adults with low leptin levels was featured in a poster presentation at the American Diabetes Association’s (ADA) 78th Scientific Sessions and showed that leptin replacement therapy sustainably decreased weight over time in patients with low baseline leptin levels.
Novelion and Aegerion’s ability to pursue these clinical development activities, and to conduct a clinical trial of metreleptin for PL, if required by the FDA as a requirement to seeking approval of PL in the
Pro Forma Debt Outstanding of Aegerion
After giving effect to the closing of the new secured financing facility described above, as of
As part of the business update, Novelion has posted an updated investor presentation on its website at https://ir.novelion.com/events-and-presentations.
Novelion, through Aegerion, is a global biopharmaceutical company dedicated to developing and commercializing therapies that deliver new standards of care for people living with rare and underserved metabolic diseases. Our goal is to develop and bring to market transformational therapies that have the potential to significantly change the treatment paradigm for patients affected by a variety of rare and metabolic diseases, including diseases associated with low leptin, such as low-leptin associated obesity. With a global footprint and an established commercial portfolio, including MYALEPT® (metreleptin) and JUXTAPID® (lomitapide), our business is supported by differentiated treatments that treat severe and rare diseases.
Novelion is the parent company of Aegerion, our operating subsidiary. References to “we,” “our” and the “Company” refer to the entire enterprise, whose assets and operations reside at Aegerion.
Non-GAAP (“pro forma”) Results
The non-GAAP results in this press release, including, without limitation, blended cash gross margins, are provided as a complement to results provided in accordance with GAAP because management believes, when considered together with the GAAP information, these non-GAAP financial measures help indicate underlying trends in the Company's business, are important in comparing current results with prior period results and provide additional information regarding the Company’s financial performance. Management also uses these non-GAAP financial measures to establish budgets and operational goals that are communicated internally and externally, and to manage the Company's business and evaluate its performance. The non-GAAP financial measures have no standardized meaning under GAAP and therefore may not be comparable to similar measures presented by other companies. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for, or superior to, the financial measures prepared and presented in accordance with GAAP and should be reviewed in conjunction with the relevant GAAP financial measures.
Forward Looking Statements
Certain statements in this press release constitute "forward-looking statements" within the meaning of applicable laws and regulations and constitute "forward-looking information" within the meaning of applicable Canadian securities laws. Any statements contained herein which do not describe historical facts, including statements regarding beliefs that the new Aegerion loan facility strengthens the balance sheet; expectations that the new Aegerion loan facility will provide a bridge to a potential comprehensive long-term capital restructuring; statements about the terms of the new financing and expectations regarding use of such funds and the opportunity it provides; beliefs about the impact of our cost reduction measures and the stability of our business; expectations regarding Novelion’s and Aegerion’s review of financial and strategic alternatives, including a restructuring of Aegerion and a potential debt for equity swap; beliefs about our operational improvement and cost-reduction initiatives, and as to the ability of Novelion or Aegerion to execute on our commercial strategy and goals; expectations for engagement with Aegerion’s convertible note holders; beliefs about product sales, blended cash gross margins, cash flow and EBITDA, including the timing for achieving positive cash flow and EBITDA (and that positive cash flow and EBITDA are achievable); commercial plans for Myalept and Juxtapid, including market expansion,
This press release also contains “forward-looking information” that constitutes “financial outlooks” within the meaning of applicable Canadian securities laws. This information is provided to give investors general guidance on management’s current expectations of certain factors affecting our business, including our financial results. Given the uncertainties, assumptions and risk factors associated with this type of information, including those described above, investors are cautioned that the information may not be an appropriate subject of reliance for other purposes.
Investors and others should note that we communicate with our investors and the public using our company website www.novelion.com, including, but not limited to, company disclosures, investor presentations and FAQs,
Source: Novelion Therapeutics, Inc.