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Capital round of 100 million gives Mithra breathing space

by

08 augustus 2022

11:33

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Mithra starts the week with doubly good news. The Liège pharmaceutical company has secured a capital round of 100 million euros and the Haloette vaginal ring can finally be sold on the American market.

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The plans for a new financing round were previously announced. Mithra

now announces that it has secured a financing of 100 million euros via a convertible bond loan to the investors Highbridge and Whitebox. The loan has a term of three years and consists of three tranches: one of 50 million and two of 25 million euros. The interest is 7.5 percent per year.

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The deal does require firm guarantees. To make them happen, Mithra is pledging all the assets of its contraceptive pill Estelle and the menopausal drug candidate Donesta, as well as half of its stake in the Australian group Mayne Pharma.

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There is also a fee (commitment fee) of 2.9 million euros. This will be paid through newly issued shares at a price of EUR 7.9401. A first package (65 percent of the total of 366,667 new shares) will follow in the coming days, the rest will follow with the second and third tranches of the loan.

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In June, Mithra raised 23.5 million euros through a private placement from existing shareholders such as the Flemish entrepreneurs Marc Coucke and Bart Versluys and the Walloon Noshaq and SRIW.

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‘Comfortable cash position’

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The new resources give Mithra significant financial breathing space. They make it possible to buy back old convertible bonds worth 34.1 million euros and they allow the company to two existing lines of credit in the United States can put on hold.

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But most importantly, they enable Mithra to invest in Donesta, the candidate drug for hot flashes during menopause. Donesta is the cornerstone of stock valuation for analysts.

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“This gives us enough resources for a licensing agreement for Donesta,” said financial director Christophe Maréchal in the press release. ‘We expect to close it in the fourth quarter at the latest.’

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Mithra is currently still negotiating with several parties, clarified spokesman Benoît Mathieu. “The fact that we have a comfortable cash position gives us more elbow room in those talks to extract all possible value from the deal.”

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Mithra hopes to launch Donesta in the critical US market in the first half of 2024, following the successful completion of its latest clinical trials.

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hard note

The news of the capital round comes on Monday on top of reports that after three years of trying and three damned Complete Response Letters from the US drug watchdog, Mithra can finally market its vaginal contraceptive ring Haloette in the US.

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Haloette, formerly known as Myring, is a generic variant of Merck & Co.’s NuvaRing, a branded drug that lost its exclusivity in April 2018. NuvaRing made the lion’s share of its sales in the United States, so Mithra was also looking forward to a launch in the American market.

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But while the drug did end up in pharmacies in other countries, the United States turned out to be a tough nut to crack. The US drug watchdog FDA sent no less than three Complete Response Letters from about the remedy. In such a letter, the company is asked for additional explanation, which always causes months of delay.

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So after three years of patience it’s time, learns an announcement from Australia’s Mayne Pharma, Mithra’s commercial partner in the United States. And that’s a boost for Mithra in a very gloomy stock market year 2022. The stock is trading on concerns about the combination of the high need for cash and the high debt burden 57 percent below New Year’s level and 30 percent below the 2012 offering price (see chart).

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