Zealand Pharma Amends Financing Agreement with Oberland Capital as Part of Company’s Refocused Strategy

Rhea-AI Summary

Zealand Pharma announced an amendment to its financing agreement with Oberland Capital, reducing the outstanding note principal from $100 million to $50 million and removing cash usage restrictions. The new deal allows for up to $75 million in incremental capital contingent upon certain events. This amendment aims to extend the company's financial runway into 2023 and supports its R&D priorities. CEO Matthew Dallas emphasized that this agreement enhances Zealand’s financial flexibility and positions it to capitalize on pipeline opportunities.

Positive

• Outstanding note principal reduced from $100 million to $50 million.
• Access to an additional $75 million in incremental capital post specific events.
• Financial runway extended into 2023, aiding R&D priorities.

Negative

• None.

Company announcement – No. 16/ 2022

Zealand Pharma Amends Financing Agreement with Oberland Capital as Part of Company’s Refocused Strategy

• Amendment reduces the outstanding note principal balance from $100 million to $50 million and removes any restrictions on the use of the cash
• Agreement includes access to an additional $75 million in incremental capital following specific events
• Financial runway extended beyond significant pipeline milestones and into 2023
  
  

Copenhagen, DK and Boston, MA, U.S. May 10, 2022 – Zealand Pharma A/S (Nasdaq: ZEAL) (CVR-no. 20045078), a biotechnology company focused on the discovery and development of innovative peptide-based medicines, today announced an amendment to its existing financing agreement with Oberland Capital Management LLC (“Oberland Capital”).

The amended terms of the agreement are:

• Zealand to repurchase $50.0 million of note principal with a 1.2x prepayment premium.
• Oberland Capital to provide Zealand with up to $75.0 million in incremental capital structured as:
  • $12.5 million at Oberland Capital’s option following positive glepaglutide data,
  • $12.5 million at a mutual option at any time, and
  • $50.0 million to be reserved for mergers and acquisitions at the mutual option of the parties.
• The liquidity covenant to be fully eliminated.
• Excluding any upfronts from partnerships on commercial assets, Oberland Capital will have the option to apply 75% of any proceeds from future licenses and/or the sale of other assets to pay down the remaining balance per the terms of the loan agreement.
• The interest rate for the Secured Note is unchanged at 6% plus 3-month LIBOR or 0.25%, whichever is greater.

“Today’s agreement gives us a strong financial foundation to be able to deliver on our R&D priorities,” said Matthew Dallas, Senior Vice President and Chief Financial Officer at Zealand Pharma. “The updated agreement, together with our previously announced restructuring, extends our cash runway into 2023 and provides us with financial flexibility and capital to progress our innovative pipeline as well as to pursue partnering opportunities for our late-stage and commercial assets.”

About Oberland Capital

Oberland Capital, a private investment firm with over $2.25 billion in capital commitments since inception, is focused exclusively on investing in the global healthcare industry and specializes in flexible investment structures customized to meet the specific capital requirements and strategic objectives of its transaction partners. Oberland Capital’s broad suite of financing solutions includes monetization of royalty streams, acquisition of future product revenues, creation of project-based financing structures, and investments in traditional debt and equity. With a combination of deep industry knowledge and extensive structured finance experience, the Oberland Capital team has a history of creating value for its transaction partners.

About Zealand Pharma A/S

Zealand Pharma A/S (Nasdaq: ZEAL) ("Zealand") is a biotechnology company focused on the discovery and development of peptide-based medicines. More than 10 drug candidates invented by Zealand have advanced into clinical development, of which two have reached the market and three candidates are in late-stage development. In addition, license collaborations with Boehringer Ingelheim and AstraZeneca create opportunities for more patients to potentially benefit from Zealand-invented peptide investigational agents currently in development.

Zealand was founded in 1998 in Copenhagen, Denmark and for more information about Zealand’s business and activities, please visit http://www.zealandpharma.com.

Forward-Looking Statement

This press release contains “forward-looking statements”, as that terms is defined in the Private Securities Litigation Reform Act of 1995, as amended, that provide Zealand Pharma’s expectations or forecasts of future events regarding the research, development and commercialization of pharmaceutical products. These forward-looking statements may be identified by words such as “aim,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “plan,” “possible,” “potential,” “will,” “would” and other words and terms of similar meaning. You should not place undue reliance on these statements, or the scientific data presented. The reader is cautioned not to rely on these forward-looking statements. Such forward-looking statements are subject to risks, uncertainties and inaccurate assumptions, which may cause actual results to differ materially from expectations set forth herein and may cause any or all of such forward-looking statements to be incorrect, and which include, but are not limited to, the occurrence of adverse safety events; risks of unexpected costs or delays; unexpected concerns that may arise from additional data, analysis or results obtained during clinical trials; failure to protect and enforce our data, intellectual property and other proprietary rights and uncertainties relating to intellectual property claims and challenges; regulatory authorities may require additional information or further studies, or may fail to approve or may delay approval of our drug candidates or expansion of product labeling; failure to obtain regulatory approvals in other jurisdictions; product liability claims; and the direct and indirect impacts of the ongoing COVID-19 pandemic on our business, results of operations and financial condition. If any or all of such forward-looking statements prove to be incorrect, our actual results could differ materially and adversely from those anticipated or implied by such statements. The foregoing sets forth many, but not all, of the factors that could cause actual results to differ from our expectations in any forward-looking statement. All such forward-looking statements speak only as of the date of this press release and are based on information available to Zealand Pharma as of the date of this release. We do not undertake to update any of these forward-looking statements to reflect events or circumstances that occur after the date hereof. Information concerning pharmaceuticals (including compounds under development) contained within this material is not intended as advertising or medical advice.

For further information, please contact:

Zealand Pharma Investor Relations
Maeve Conneighton
Argot Partners
investors@zealandpharma.com

Zealand Pharma Media Relations
David Rosen
Argot Partners
media@zealandpharma.com

FAQ

What are the new financing terms for Zealand Pharma as of May 2022?

Zealand Pharma amended its agreement with Oberland Capital to reduce the outstanding note from $100 million to $50 million and allowed access to up to $75 million in incremental capital.

How does the financing amendment benefit Zealand Pharma's pipeline?

The financing amendment extends Zealand Pharma's financial runway into 2023, enabling the company to focus on its R&D and pipeline development.

What restrictions were lifted in Zealand Pharma's financing agreement?

The amended agreement removes restrictions on the use of cash, providing greater financial flexibility for Zealand Pharma.

What is Zealand Pharma's stock symbol?

The stock symbol for Zealand Pharma is ZEAL.