Danish drugmaker Egalet ($EGLT) said it completed a secured debt offering of $40 million it plans to use to meet previous loan agreements and support its pipeline of abuse-deterrent pain meds.
The debt offering comes in the wake of a FDA advisory panel vote in early August that recommended approval of Egalet’s abuse-deterrent pain medication Arymo ER (morphine sulfate).
The company said the money raised in the offering will go to repay all outstanding obligations to Hercules Capital, Inc. under its existing loan agreement. The funds will also support the approval and planned commercialization of Arymo ER and to support the development of Egalet-002, an abuse-deterrent, extended-release oxycodone, as well as for general corporate purposes.
Morgan Stanley & Co. LLC acted as sole placement agent for the transaction.
The company received $40 million (before expenses) at the close of the transaction, and will receive an additional $40 million if the FDA approves Arymo ER on or before June 30, 2017.
"This non-dilutive financing puts us in a good position to bring Arymo ER through FDA approval and if approved commercial launch, to complete Egalet-002 late-stage development and to conduct additional research and development of other compounds employing our proprietary Guardian technology," Bob Radie, president and CEO, said in a statement.
Arymo ER is designed to help patients manage pain that requires daily, long-term opioid treatment when alternative treatments are insufficient. A decision by the regulatory on approval of the drug is expected in October.
Drug companies have been responding to the epidemic of opioid abuse and rising number of overdose deaths in the U.S. in recent years with medications that are less likely to be abused, as well as drugs that help counteract overdose deaths.
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