- The repayment eliminates the total debt of $39.1 million
- Early repayment entails:
- Total interest savings of C$9.1 million
- Immediate termination of the loan agreement and release of security interests in all its secured assets, including intellectual property
- Immediate Termination of Royalty Stream Agreement with Structured Alpha LP
- Immediate cancellation of all Warrants issued under the Restructuring Agreement
- Immediate release from all commitments under loan and mandate agreements
LAVAL, QC and CAMBRIDGE, England, February 16, 2022 /PRNewswire/ – Liminal BioSciences Inc. (Nasdaq: LMNL) (“Liminal BioSciences” or the “Company”), today announced that it has repaid its debt of $39.1 million to Structured Alpha LP (“SALP”) in full, using cash on hand. Repayment of the loan terminates the Company’s creditor relationship with SALP.
“The early repayment of this debt is part of our strategy to rationalize our activities, deleverage our balance sheet and eliminate the associated interest charges,” said Bruce Prichard, CEO of Liminal BioSciences. “Furthermore, following the prepayment, all SALP-secured interest on the Company’s assets is released and will be discharged, allowing us to regain full control of our intellectual property. This streamlines the path forward for our operations and gives us flexibility for the future, including with respect to possible transactions around our pipeline assets The debt, which was previously secured by all of the Company’s assets, was to be repaid no later than April 2024 and represented a significant surplus on our balance sheet, which we are happy to have eliminated. Mr. Pritchard added: “While we have terminated our creditor relationship with SALP, we welcome their continued support as our lead investor.
“We are pleased to have supported the Liminal business over the past 8 years as a lender and we are pleased, as a shareholder, to see the Company align with its peers and advance its small molecule business,” commented Robert Boron, representative of SALP. The Company has repaid all outstanding indebtedness under the Consolidated Loan Agreement (the “Repayment”) as of April 27, 2017as amended and updated in accordance with the restatement April 23, 2019 and as amended in November 2019 (the “Loan Agreement”). The repayment terminates the Loan Agreement, certain warrant obligations under this Loan Agreement and the Royalty Stream Purchase Agreement dated May 1, 2018, and releases the Company from all the commitments contained therein. All security interests, mortgages, encumbrances and other liens granted by the Company and its affiliates over their assets, including intellectual property, under the Loan Agreement and related documents have been released and will be released in full.
The reimbursement was funded by cash generated from the sale of a pediatric exam voucher and the divestiture of the company’s plasma-derived therapeutics business which occurred in 2021 and represents savings of approximately 9.1 million Canadian dollars in total future interest expense. The Company believes that repaying debt while the Company is well funded to continue its current operations is in the best interests of the Company and reflects its commitment to prudent management and oversight of its financial resources. No premium or penalty was required in connection with the reimbursement.
During the remainder of 2022, the Company will continue to review the condition of its balance sheet and actively seek opportunities to monetize non-core assets and ways to reduce costs related to certain commitments associated with the organization’s past operations.
About Liminal BioSciences Inc.
Liminal BioSciences is a biopharmaceutical company focused on the discovery and development of novel small molecule drug candidates for the treatment of patients with fibrotic or inflammatory diseases who have a high unmet medical need. The Company’s lead small molecule product candidate, fezagepras, has completed the clinical phase of the MAD Phase 1 clinical trial and the Company is in the process of evaluating the full PK data set from the clinical trial of phase 1 MAD. The Company expects to notify the market of any further development plans for fezagepras in the first half of 2022. In addition, the Company is also currently developing a selective GPR84 antagonist candidate and an oral selective OXER1 antagonist candidate. Our GPR84 and OXER1 antagonist programs are currently in the preclinical stage.
Liminal BioSciences is engaged in active business activities in Canada and the UK.
About Structured Alpha LP
Structured Alpha LP (“SALP”) is a limited partnership of which Thomvest Asset Management Ltd. is the sole general partner. Thomvest Asset Management Ltd. is a Torontoinvestment management company controlled by Peter J. Thomson. As general partner of SALP, Thomvest Asset Management Ltd. continuously reviews investment alternatives and may buy or sell securities of the Company from time to time in accordance with applicable laws.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Some of the forward-looking statements can be identified by the use of forward-looking terms. Statements that are not historical in nature, including the words “anticipate”, “expect”, “suggest”, “plan”, “believe”, “intend”, “estimate”, ” target”, “project”, “should”, “could”, “would”, “could”, “will”, “forecast” and other similar expressions are intended to identify forward-looking statements. Such statements include those relating to objectives, strategies and activities of Liminal BioSciences that involve risks and uncertainties. Forward-looking information includes statements regarding, among other things, the advancement of Liminal Biosciences’ product candidates, results of analysis of the phase 1 MAD; the potential development of Liminal Biosciences’ R&D programs and the timing or nature of preclinical and clinical trials; our ability to improve our financial position, the impact of the early repayment of debt to SAL P on our cash trail or transaction potential around our assets, the release of collateral, our ability to actively seek out and close monetization opportunities for non-core assets, and reduce contract-related costs associated with past operations of the ‘organization.
These statements are “forward-looking” because they are based on our current expectations about the markets in which we operate and on various estimates and assumptions. Actual events or results may differ materially from those anticipated in these forward-looking statements if known or unknown risks affect our business, or if our estimates or assumptions prove to be inaccurate. Among the factors that could cause actual results to differ materially from those described or projected herein include, but are not limited to, risks associated with: the Company’s ability to develop, manufacture and market with success of product candidates, if any; the impact of the COVID-19 pandemic on the Company’s workforce, business operations, clinical development, regulatory activities and financial and other impacts on the business; the availability of funds and resources to pursue R&D projects, clinical developments, manufacturing operations or commercialization activities; the successful and timely initiation or completion of clinical trials; Liminal BioSciences’ ability to take advantage of funding opportunities or business opportunities in the pharmaceutical industry; the uncertainties generally associated with research and development, clinical trials and related regulatory reviews and approvals; and general changes in economic conditions. A more detailed assessment of these risks, uncertainties and other risks that could cause actual events or results to differ materially from our current expectations can be found in the Company’s filings and reports with the Securities and Exchange Commission. United States and Canadian Securities Administrators, including in the Annual Report on Form 20-F for the fiscal year ended December 31, 2020, as well as other filings and reports that Liminal Biosciences may make from time to time. These risks may be magnified by the ongoing COVID-19 pandemic and any related impact on Liminal BioSciences’ business and the global economy. Accordingly, we cannot guarantee that any particular forward-looking statement will occur. Existing and potential investors are cautioned not to place undue reliance on these forward-looking statements and estimates, which speak only as of the date hereof. We undertake no obligation to update any forward-looking statements contained in this press release, even if new information becomes available, as a result of future events or for any other reason, except if applicable laws and regulations of securities require it.
SOURCELiminal BioSciences Inc.