Molecular Templates, a clinical-stage biopharmaceutical company focused on the discovery and development of proprietary targeted biologic therapeutics called engineered toxin bodies to create novel therapies with differentiated mechanisms of action for cancer, entered into a restructuring agreement with K2 HealthVentures to satisfy and discharge its outstanding secured debt obligations and terminate all other obligations under the existing debt financing facility between Molecular Templates and K2 HealthVentures. Molecular Templates also announced a restructuring plan that includes reducing its current workforce as it continues to explore strategic alternatives.
The restructuring agreement provides for the following:
- Molecular Templates has paid down $27.5 million of its $37.8 million senior secured debt obligation with K2 HealthVentures.
- The remaining balance of roughly $10 million will be converted into a security instrument that will be paid back upon the occurrence of certain specified events, such as a successful asset sale or BD transactions, based on specified multipliers and other terms, or, in the alternative, Molecular Templates may elect to pay off the balance in part or in full. Alternatively, K2 HealthVentures has the right to convert $3 million of such contingent value rights into up to 6,124,011 shares of common stock.
- K2 HealthVentures has a warrant to purchase 5,103,343 shares of common stock at an exercise price of roughly $0.39 per share.
- In the event of a change in control transaction, as defined in the restructuring agreement, K2 HealthVentures will receive an additional $2.5 million.
_x000D_
_x000D_
_x000D_
_x000D_
Previously, Molecular Templates retained Stifel, Nicolaus & Company to assist it in initiating an evaluation of strategic alternatives, including, but not limited to, potential financing/recapitalization opportunities, the sale of all or part of the company, a merger, or other strategic transactions. A timetable for completion of this strategic review process has not been set, and there can be no assurance that this strategic review will result in any completed transaction. In connection with the evaluation of strategic alternatives, Molecular Templates today implemented a restructuring plan that includes reducing its current workforce by approximately 44%.
Molecular Templates intends to continue to support its collaboration with BMS and its clinical studies.
