Novelion Therapeutics, a biopharmaceutical company dedicated to developing new standards of care for individuals living with rare metabolic diseases, announced that its subsidiary, Aegerion Pharmaceuticals, after soliciting third party lenders, entered into a new secured financing facility with certain funds managed by Athyrium Capital Management and Highbridge Capital Management._x000D_
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The facility consists of $50 million in new secured first lien term loans that were funded to Aegerion in cash and $22.5 million of new secured term loans that were used, on behalf of Aegerion, to retire an equal amount of Aegerion’s 2% convertible notes due August 2019, at par, held by certain funds managed by each of Athyrium and Highbridge. Additionally, approximately $21.2 million of the proceeds from the financing facility were used by Aegerion to repay in full the indebtedness outstanding under a secured loan facility entered into in March 2018, and $3.5 million of the proceeds from the financing facility were used to repay, in part, the existing secured loan facility made by Novelion to Aegerion. The remaining proceeds of approximately $25.3 million from the new secured financing facility, less approximately $3.5 million in fees and expenses required to be paid by Aegerion in connection with such facility, will be available to Aegerion for general corporate purposes._x000D_
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Jeff Hackman, interim chief executive officer, said, “The operational improvement and cost reduction initiatives that we executed throughout 2018 have made an impact on the stability of our business, and position Aegerion to become cash flow positive by the second quarter of 2019. This financing, which was sized to provide adequate runway to bridge to cash generation at the Aegerion level, also sets us on a path to a more comprehensive capital restructuring – our primary near-term goal. We are encouraged by an ongoing productive dialogue with Aegerion’s convertible debtholders to help us meet this goal, and are pleased that some of our largest bondholders showed further support for the company by providing us with this new capital. As always, we will strive to continue to serve our patients and ensure that our important therapies continue to be made available to those in need.”_x000D_
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Hondo Sen, a Partner at Athyrium, said, “We believe that with a portfolio of important rare disease therapies there is a fundamental business opportunity to pursue.”_x000D_
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Jonathan Segal, managing director and portfolio manager at Highbridge, added, “We believe that through this financing we can help bridge the company to a comprehensive long-term capital restructuring and allow it to take advantage of that business opportunity.”_x000D_
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Aegerion has engaged Moelis & Company and AlixPartners, both of whom advised on the capital raise, to continue the comprehensive review of Aegerion’s capital structure. Novelion and Aegerion have also engaged Evercore and Moelis & Company, respectively, to explore and advise the companies on all available financial and strategic options, such as a restructuring of Aegerion’s outstanding convertible notes (including a restructuring that would likely involve a debt for equity swap), a possible sale or merger of Novelion or Aegerion, or the sale or other disposition of certain businesses or assets, including territorial licensing deals. The New Lenders engaged Ducera Securities LLC to advise on the capital raise._x000D_
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The new facility has a maturity date of February 15, 2019, however, the maturity date may be extended, at Aegerion’s option, to June 30, 2019 subject to the payment of a fee to the New Lenders under the new facility, the delivery to such lenders of a term sheet contemplating a sale of Aegerion or its assets that may be acceptable to Aegerion and its board of directors, the bring-down of certain representations and warranties of Aegerion, and the satisfaction of certain other conditions. While the funds received from the new facility allow the Company to meet its immediate operational needs and obligations, Aegerion may not be able to successfully refinance its approximately $36.8 million secured loan from Novelion, its remaining approximately $302.5 million principal amount of 2.0% convertible senior notes due August 15, 2019, or the new facility with an aggregate principal amount of $72.5 million. Effecting such a refinancing, or other wholesale recapitalization or other strategic alternative (and some of these alternatives could potentially lead Novelion and/or Aegerion to seek certain protections afforded under law, including U.S. or Canadian bankruptcy codes) will be critical for us to continue to execute on our commercial strategy and pursue our goals and objectives, and we may not be successful in doing so._x000D_
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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.
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