Zealand Pharma has announced a financing agreement with Oberland Capital Management that includes an upfront payment of $100m in exchange for a seven-year, interest-only secured note.
Besides the $100m upfront payment, Zealand will receive $50m in exchange for an additional note with terms and conditions in line with the secured note.
This is available at Zealand’s option any time before 31 December 2023, following receipt of approval of glepaglutide to treat short bowel syndrome (SBS) by the FDA.
The other condition is that Zealand will get up to $50m in exchange for an extra note on mutually agreed terms. This is available at Zealand’s option any time before 30 June 2023, to buy products and/or companies.
The interest rate for the secured note is 6% in addition to three month LIBOR or 0.25%, whichever is found to be greater.
Oberland Capital will also receive a low single-digit royalty obligation on net sales during the term of the agreement.
Zealand Pharma senior vice president and chief financial officer Matthew Dallas said: “This new funding from Oberland Capital enables us to continue to selectively invest in our robust clinical-stage pipeline, which includes multiple programs in Phase 3 trials across a range of metabolic and gastrointestinal diseases, as well as in our pre-clinical pipeline.
“Importantly, in addition to the initial $100 million upfront payment, a further $50 million becomes available on the potential approval of glepaglutide for the treatment of SBS, where we anticipate Phase 3 pivotal trial results in Q3 of 2022.”
Oberland Capital partner William Clifford said: “We are delighted to support Zealand in its mission to develop and commercialize medicines for patients in need of new treatments for metabolic and gastrointestinal diseases.
“The Zealand team has a clear mission of delivering five commercialized products by 2025, aiming to change the lives of patients, and we are excited to partner with them on this path forward.”