Emisphere Technologies has announced that it has reached an agreement with MHR Fund Management to waive certain terms of the company’s existing obligations under the loan facility.
Also to be waivered are various promissory notes previously issued to MHR and the royalty agreement, which provides for payments to MHR based on sales of the Company’s Eligen® B12 product. In addition, the royalty payment terms of the Company’s existing GLP-1 Development and License Agreement with Novo Nordisk is to be renewed.
MHR agreed to revise the terms of the loan facility to provide for a permanent reduction of $7m to the outstanding principal amount owed to MHR. This reduction will become effective upon the first commercial sale of a product under the GLP-1 Agreement.
The cash proceeds sweep, provided for in both the loan facility and certain of the promissory notes, has been suspended until October 2018, except in certain circumstances where proceeds subject to the sweep exceed $5m in any twelve month period. In addition, MHR agreed to irrevocably waive the application of the cash proceeds sweep, which would have required payment to MHR of approximately $7m resulting from proceeds received by the company from Novo Nordisk in 2015.
MHR further agreed to waive its right to payments owed to it under the Royalty Agreement in respect of net sales of Eligen® B12 during the fical year ending 2015 and any event of default under the loan facility or certain promissory notes resulting from the Company’s failure to timely satisfy future Eligen® B12 sales milestones, as specified therein.
The payment terms of the GLP-1 Agreement were revised to provide for payment by Novo Nordisk directly to MHR of a portion of any royalties payable to the company under the terms of the GLP-1 Agreement equal to .5% of net sales for any licensed product subject to the GLP-1 Agreement.
Chief executive officer and president of Emisphere Alan L. Rubino said: "We are most enthusiastic to have the continued financial support and latitude extended by the new debt restructuring agreement with MHR. The management team highly values their firm vote of confidence in Emisphere’s prospective business plan, the potential of Oral GLP-1, and the solid runway to realise the promise of additional future growth initiatives".