Prometic Life Sciences has entered into an agreement to sell up to $50 million in stock over the next 16 months. The agreement gives Prometic a way to trickle cash into its bank account while working to escape its current financial pressures.
Canada-based Prometic was put under pressure earlier this year when the FDA asked it to make and validate process changes for Ryplazim, a congenital plasminogen deficiency treatment that is going through the BLA process. Prometic responded to the setback by taking steps to extend its financial runway, both by cutting costs and getting money into the business.
With R&D costs expected to fall by $30 million in 2019, one side of the equation looks to be in place. However, Prometic is yet to land the deal it needs to deliver a hit of non-dilutive financing and secure the future of Ryplazim and its other pipeline prospect PBI-4050.
In the absence of such a deal, Prometic is turning to equity markets. The agreement gives Prometic the option of drip feeding up to $50 million of stock to investors over the next 16 months, potentially giving it a way to top up its bank balance whenever conditions are favorable.
“We believe the addition of an [at-the-market] program represents an appropriate potential source of additional capital that complements our ongoing efforts to extend our cash resources,” Prometic CEO Pierre Laurin said in a statement. “Multiple options to access reasonably-priced capital are key to the continued development of our core assets.”
The agreement forms part of a patchwork of initiatives designed to improve Prometic’s finances. In addition to the aforementioned cost cutting, Prometic has pushed back the maturation of its debt until 2024, sold $14 million worth of plasma it stockpiled in anticipation of the Ryplazim approval and remains on the hunt for additional “equity and equity-related initiatives.”
By pursuing the initiatives, Prometic hopes to have the financial means to keep its programs moving forward and strengthen its hand if a potential partner comes to the deal table. Prometic had around $21 million in cash at the end of September, having burnt through $57 million over the first nine months of the year.