Inventiva successfully raised approximately €14.6 million through a combination of its ATM Program for €9.3 million and new State-backed bank financing for €5.3 million
In accordance with the terms of the credit facility announced on May 16, 2022, Inventiva entered into a warrant agreement with the European Investment Bank on July 1, 2022
Cash runway extended until the end of second quarter 2023
Inventiva a clinical-stage biopharmaceutical company focused on the development of oral small molecule therapies for the treatment of patients with non-alcoholic steatohepatitis (NASH) and other diseases with significant unmet medical needs, today announced the strengthening of its cash position by approximately €14.6 million through its At-The-Market program (the “ATM Program“) and new state-backed bank financing. This extends the Company’s cash runway until the end of the second quarter 2023, based on existing cash, cash equivalents and short-term deposits and without taking into account the credit facility with the European Investment Bank (the “EIB”). The Company also finalized the documentation requirement under the credit facility with the EIB (the “Finance Contract“) for up to €50 million as announced on May 16, 2022 by the signing of a warrant agreement (the “Warrant Agreement“). The Company plans to use the proceeds from the EIB facility towards its preclinical and clinical pipeline, including to help fund a portion of its Phase III clinical trial of lanifibranor in patients with NASH.
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Equity raised through the At-The-Market Program:
On June 15, 2022, the Company sold 1,260,618 American Depositary Shares (“ADS“) for an amount of $9,769,789.501 pursuant to the Company’s ATM program established on August 2, 2021, through Jefferies LLC, acting as sales agent. Each ADS represents one ordinary share of the Company.
The new shares underlying the ADS issued under the ATM Program represented approximatively 3% of the share capital of the Company as of the date of the transaction.
Non-dilutive debt financing of €5.3m in the form of an additional state-guaranteed loan facility and two loans from a stimulus economic plan:
In June 2022, the Company signed three loan agreements with French banks for a total amount of €5.3 million, guaranteed in part by the French State. Implemented as part of a state-guaranteed PGE loan facility (“Prêt Garanti par l’Etat“) with Bpifrance and two loans from a stimulus economic plan (“Prêts Participatifs Relance“) granted by Crédit Agricole Champagne-Bourgogne and Société Générale, they are in large part guaranteed by the French State and have a duration of eight-year and a four-year repayment schedule.
Terms of the Finance Contract:
As previously announced, the Finance Contract is divided into two tranches of €25 million each which are subject to the completion of certain condition precedents. The disbursement of the first tranche (with capitalized interest of 8% and a maturity date of four years) is subject to, among other conditions, (i) the Company entering into a subscription agreement under the Warrant Agreement to issue warrants to the EIB and (ii) the receipt by the Company of an aggregate amount of at least €18 million, paid either through the issuance of new Company shares, or through upfront or milestone payments. As of today, the Company raised €9.3 million through a capital increase under its ATM Program.
The disbursement of the second tranche of €25 million (with capitalized interest of 7% and a maturity date of three years) is further subject to, among other conditions, (i) the full drawdown of the first tranche, (ii) the issue of the second tranche of warrants, (iii) the receipt by the Company of an aggregate amount of at least €70 million (inclusive of the €18 million mentioned above), made of either the issuance of new Company shares, or through upfront or milestone payments coming from business development activities on the various assets of the Company, (iv) (a) an out-licensing, partnership or royalty transaction with an upfront payment of at least €10 million, or (b) the initiation of a Phase III clinical trial of cedirogant by AbbVie Inc; and (v) operational criteria based on patient enrollment and number of sites activated in the Company’s Phase III clinical trial of lanifibranor in patients with NASH.
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The two tranches will be available within 36 months following the signature of the Finance Contract.
Prepayment events under the Finance Contract:
The Finance Contract may, in certain circumstances, be prepaid, in whole or in part, for a prepayment fee, either at the election of the Company or as a result of EIB’s demand following certain prepayment events, including a change of control or change in senior management of the Company.
Subject to certain terms and conditions, upon the occurrence of usual events of default (i.e. including payment default, misrepresentation, cross default), EIB may demand immediate repayment by the Company of all or part of the outstanding loan and/or cancel the undisbursed tranches.
Terms and Conditions of the warrants:
As described above, in connection with the Finance Contract, the Company agreed to issue warrants to EIB as a condition to the funding of each tranche. The number of warrants to be issued to EIB will be determined based on (i) the aggregate amount raised by the Company through one or more equity offerings, or through upfront or milestone payments, from the date of the Finance Contract to the time of the disbursement of the relevant tranche, and (ii)(a) the average price per share paid for the Company shares in its most recent qualifying equity offering, or (b) for the first tranche only, in case of no qualifying equity offering, the volume weighted average price per share of the Company shares over the last 180 calendar days. The subscription price shall be €0.01 per warrant.
The warrants have a maturity of twelve years and shall be exercisable following the earliest to occur of (i) a change of control event, (ii) the maturity date of the first tranche, (iii) an event of default under the Finance Contract, or (iv) a repayment demand by the EIB under the Finance Contract. The warrants shall automatically be deemed null and void if they are not exercised within the twelve-year period. Each warrant will entitle EIB to one ordinary share of the Company in exchange for the exercise price (subject to anti-dilutive provisions).
The exercise price will be equal to 95% of the volume weighted average of the trading price of the Company shares on the regulated market of Euronext Paris for the last trading session preceding the decision of the competent body of the Company to issue such warrant. EIB shall be entitled to a put option at its intrinsic value, (subject to a cap equal to the drawn amount under the Finance Contract) to require the Company to buy back all or part of the warrants then exercisable but not yet exercised in certain circumstances (for instance in case of change of control or at the maturity date of the first tranche or in case of event of default). Furthermore, the Company shall be entitled to a call option to require EIB to sell to the Company (or a substitute third party) all the warrants, and a right of first refusal to buy back any warrants that are offered for sale to a third party, subject to certain exceptions.
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