BioPharma secures second deal for up to $200m – BioPharma Credit PLC has announced that it and BioPharma Credit Investments IV, S.àr.L., entered into a definitive term loan agreement for up to US$200 million with Lexicon Pharmaceuticals, Inc. (NASDAQ: LXRX), a fully integrated biopharmaceutical company with a current market capitalisation of approximately US$1.0bn.
Lexicon markets XERMELO® (teloristat ethyl) for the treatment of carcinoid syndrome diarrhoea in the United States and has licensed XERMELO® to Ipsen Pharma SA for commercialisation in territories outside of the United States and Japan. Lexicon is also developing sotagliflozin for the treatment of type 1 and type 2 diabetes in partnership with Sanofi. Lexicon intends to use the proceeds of the financing to support the commercial efforts of XERMELO, advance sotagliflozin, as well as to execute on the clinical development of other earlier stage product candidates.
“We are pleased to be partnering with Lexicon in this transaction,” said Martin Friedman, Managing Member of Pharmakon Advisors. “We are impressed with the Lexicon team and the commercial opportunities for XERMELO and are thrilled to support Lexicon in its ramp up of this product that fills a well-defined unmet patient need.”
Pedro Gonzalez de Cosio, CEO of Pharmakon Advisors LP, commented, “We are delighted to announce our second major investment since our IPO and to partner with Lexicon in this transaction. Following the announcement of our investment with Tesaro last month, this provides another opportunity for BioPharma Credit to grow and deploy its cash reserves in loans that we believe will deliver real shareholder value and make a positive difference for patients.”
The US$200 million loan will be available in two tranches, each maturing in December 2022 and bearing interest at 9.0% per annum. The first US$150 million is available immediately and an additional tranche of US$50 million is available for draw by March 2019 at Lexicon’s option if net XERMELO sales are greater than US$25 million in the preceding quarter. Under the terms of the transaction, the company will invest up to US$166m (US$124.5m in the first tranche and up to an additional US$41.5m by March 30, 2019) and BioPharma-IV will invest up to US$34m in parallel with the company acting as collateral agent. The loan is secured by substantially all of Lexicon’s assets, including its rights to XERMELO® and sotagliflozin.
XERMELO® is the first and only orally administered therapy for the treatment of carcinoid syndrome diarrhoea in combination with somatostatin analog (SSA) therapy in adults inadequately controlled by SSA therapy. Carcinoid syndrome is a rare and debilitating condition that affects people with metastatic neuroendocrine tumours (mNETs). XERMELO targets the overproduction of serotonin inside mNET cells, providing a new treatment option for patients suffering from carcinoid syndrome diarrhoea. XERMELO® was approved by the U.S. Food and Drug Administration in February 2017 and by the European Commission in September 2017.
About Carcinoid Syndrome
Diarrhea is one of the most common and life-disrupting symptoms of Carcinoid Syndrome. It affects nearly 80% of people with Carcinoid Syndrome. Even with somatostatin analog (SSA) treatment, some people continue to experience Carcinoid Syndrome diarrhea.
Carcinoid Syndrome diarrhea is caused by an overproduction of serotonin inside neuroendocrine tumor (NET) cells. Too much serotonin increases the amount of fluid in the gut. It also speeds up the function of the gut. This causes diarrhea, which can happen throughout the day. Short bowel syndrome, an overgrowth of bacteria in the gastrointestinal tract, and the use of SSA injections may also cause diarrhea.
Carcinoid Syndrome is a chronic condition and a cure may not be possible, however, the symptoms can be treated with medication.
BPCR : BioPharma secures second deal for up to $200m