On September 12, 2022 NANOBIOTIX (Euronext: NANO –– NASDAQ: NBTX – the ‘‘Company’’), a late-clinical stage biotechnology company pioneering physics-based approaches to expand treatment possibilities for patients with cancer, reported reaching an agreement in principle to restructure €30.7 million in outstanding debt obligations related to the Company’s 2018 loan agreement with the European Investment Bank ("EIB") (Press release, Nanobiotix, SEP 12, 2022, View Source [SID1234619426]).
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"The European Investment Bank has shown an unwavering commitment to supporting potentially disruptive healthcare innovation in the European Union and this agreement in principle is a testament to their strength as a strategic partner," said Bart Van Rhijn, chief financial officer, Nanobiotix. "In view of macroeconomic volatility and the impact on the overall biotechnology industry, Nanobiotix continues to prioritize lead registrational programs for NBTXR3 as a single agent activated by radiotherapy and in combination with checkpoint inhibitors for the treatment of head and neck cancer. Restructuring existing debt obligations to extend the maturity date of the loan will enable Nanobiotix to drive priority development programs in 2023 by extending operating runway an additional quarter. Combined with the committed access to capital available through our existing equity line, this provides Nanobiotix with the ability to extend its operating runway into the first quarter of 2024."
The finance contract and royalty agreement established with the EIB in July 2018 consisted of an initial tranche of €16.0 million drawn in October 2018 and repayable in a single installment at maturity in 2023 and a second tranche of €14.0 million granted in March 2019 and repayable in semi-annual installments of principal and interest after a two-year grace period. The 2018 agreement also included a commitment to pay low single-digit royalties annually over a six-year period beginning in January 2021.
The agreement in principle is structured around Nanobiotix expected cash inflow from future non-dilutive value drivers including planned commercialization1 of NBTXR3 and potential partnerships. The agreement in principle allows for deferment of approximately €25.3 million in principal repayments up to June 2029 and approximately €5.4 million in payment-in-kind (PIK) interest payments up to October 2024. It also includes an additional €20.0 million payment with a due date in 2029 which could be accelerated based on potential cash inflow. The outstanding debt obligations will continue to accrue interest until the new maturity dates. The six-year royalty period included in the 2018 agreement is also being revised to commence upon commercialization.
Execution by the Company and EIB of a definitive amendment, expected in Q4 2022, is subject to finalization of the necessary documents and agreements.