On December 12, 2022 Inventiva (Euronext Paris and Nasdaq: IVA) (the "Company"), 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, reported the receipt of the €25 million payment under the first tranche of the unsecured loan agreement executed with the European Investment Bank ("EIB") on May 16, 2022 with a maturity date of December 2026 (the "Finance Contract") (Press release, Inventiva Pharma, DEC 12, 2022, View Source [SID1234625125]).
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Jean Volatier, Chief Financial Officer of Inventiva, stated: "We are pleased to see that our long-term partnership with the EIB is bearing fruit. This payment of the first tranche of €25 million, triggered by the progress made on our NATiV3 Phase III trial and the completion of the cash injections condition precedent for this tranche, will further support the development of lanifibranor. We remain strongly focused on the recruitment of patients in our Phase III trial and are hoping to satisfy all conditions for the disbursement of the second tranche of €25 million from the EIB."
As previously announced, the Finance Contract provides funding in two tranches of €25 million each, which are both subject to the completion of certain conditions precedent. Any drawings under the terms of the Finance Contract that have not been disbursed within 36 months from the signing of the Finance Contract, (i.e., before May 16, 2025), cannot be completed at a later date. There is no assurance that the Company will be able to satisfy the conditions precedent for the drawing of the second tranche2.
The disbursement of the first tranche (with 8% interest capitalized annually, a maturity of 4 years and a repayment in fine) was subject to, among other conditions, (i) the Company issuing warrants to EIB in accordance with the terms and conditions of the warrants agreements entered into July 1, 2022, and (ii) the Company’s receipt from the date of the Finance Contract of an aggregate amount of €18 million, paid either in exchange for new shares of the Company or through the receipt of upfront or milestone payments.
On June 15, 2022, the Company raised €9.3 million through a capital increase under its ATM program. On November 4, 2022, the Company received an upfront payment of $12 million under its collaboration agreement with Sino Biopharm.
On November 28, 2022, the Company issued 2,266,023 warrants to EIB, in accordance of the terms of the 25th resolution of the combined general meeting of shareholders of May 19, 2022 and Article L.225-138 of the French Commercial Code, as a condition to the financing of the first tranche, representing approximately 5.4% of the Company’s share capital outstanding as of the date hereof.
The exercise price of the warrants is equal to €4.0152 and corresponds to 95% of the volume-weighted average price of the Company’s shares on the regulated market of Euronext Paris during the last trading session preceding the decision to issue the warrants.
As previously announced, the warrants have a maturity of twelve years and shall be exercisable following the earliest to occur of (i) the maturity date of the first tranche (i.e. on December 8, 2026), (ii) a change of control event, (iii) an event of default under the Finance Contract, or (iv) a repayment demand by EIB under the Finance Contract. The warrants will automatically be deemed null and void if not exercised within the twelve-year period.
EIB has a put option which may require the Company to repurchase all or part of the unexercised warrants then exercisable at their intrinsic value (subject to a cap equal to the amount drawn under the Finance Contract) under certain circumstances (for example, in the event of a change of control or on the maturity date of the first tranche or in the event of default). The Company (or a substitute third party) has a call option to require EIB to sell all shares and other securities of the Company, including the warrants, to the Company, subject to certain terms and conditions. In addition, the Company has a right of first refusal to buy-back all warrants offered for sale to a third party, subject to certain terms and conditions.
On the basis of the 2,266,023 new shares of the Company issuable upon exercise of all the warrants at a price of €4.0152 per new share, the Company could potentially receive gross proceeds of up to €9,098,535. There is no assurance that EIB will exercise any or all of the warrants or that the Company will receive any proceeds from the exercise of the warrants.