Poxel Reports Financial Results for First Half 2024 and Provides an Update on its Financial Position and Outlook

   -- 
 Following the non-adoption of certain financial delegations at the 
      Annual General Meeting of November 28, 2024: 
 
          -- 
 Cash runway significantly reduced 
 
 
          -- 
 Redemption of the ORANE held by IRIS due, rendering redemption 
             of the IPF Partners bonds also due in the absence of a new General 
             Meeting authorizing the issue of new shares to redeem the ORANE 
 
 
          -- 
 Without the renewal of the authorization by the General Meeting 
             and subject to an agreement with its creditors, the Company may 
             not be able to meet the redemption requests of IRIS and IPF 
             Partners 
 
 
 
 
   -- 
 Suspension by the Company until further notice of the drawdown of new 
      ORANE tranches under the equity-linked financing facility put in place 
      with IRIS 
 
 
   -- 
 Downward revision of corporate officers' compensation 
 
 
   -- 
 Upcoming Combined General Meeting to be held on February 11, 2025, to 
      adopt new financial delegations to maintain the cash runway to end-2025 
      and avoid the immediate redemption of the ORANE and the IPF Partners 
      bonds 
 
LYON, France--(BUSINESS WIRE)--December 09, 2024-- 

Regulatory News:

POXEL SA (Euronext : POXEL - FR0012432516), a clinical stage biopharmaceutical company developing innovative treatments for chronic serious diseases with metabolic pathophysiology, including metabolic dysfunction-associated steatohepatitis (MASH) and rare metabolic disorders, today announces its half-year financial results for the period ended June 30, 2024 and provides an update on its financial situation and outlook, in particular following the non-adoption of certain financial resolutions by the Annual General Meeting on November 28, 2024.

First Half 2024 Financial Statements (IFRS Standards)

Income statement(1)

 
                                                      H1 2024    H1 2023 
EUR (in thousands)                                    6 months   6 months 
---------------------------------------------------  ---------  --------- 
Revenue                                                1,162       955 
---------------------------------------------------  ---------  --------- 
Cost of sales                                         (1,146)     (955) 
---------------------------------------------------  ---------  --------- 
Gross margin                                            16          - 
---------------------------------------------------  ---------  --------- 
Net research and development expenses*                 (521)     (2,424) 
---------------------------------------------------  ---------  --------- 
Depreciation and amortization of intangible assets       -      (16,572) 
---------------------------------------------------  ---------  --------- 
General and administrative expenses                   (3,205)    (4,278) 
---------------------------------------------------  ---------  --------- 
Operating income (loss)                               (3,710)   (23,274) 
---------------------------------------------------  ---------  --------- 
Financial income (expenses)                           (3,548)    (2,968) 
---------------------------------------------------  ---------  --------- 
Income tax                                               -          - 
---------------------------------------------------  ---------  --------- 
Net income (loss)                                     (7,258)   (26,243) 
---------------------------------------------------  ---------  --------- 
 
 
*Net of R&D tax credit. 
 

As already announced on September 9, 2024, Poxel reported revenue of EUR 1.162 million in the first half of 2024, as compared to EUR 955 thousand for the same period in 2023, mainly corresponding to the JPY 199 million (EUR 1,162 thousand(2) ) of royalty revenue from Sumitomo Pharma, which represents 8% of TWYMEEG net sales in Japan.

Cost of sales amounted to EUR 1.1 million as of June 30, 2024, corresponding to the 8% royalties on net sales of Imeglimin in Japan due to Merck Serono, as part of the Merck Serono license agreement.

R&D expenses totaled EUR 0.5 million for the first half of 2024, as compared to EUR 2.4 million for the same period in 2023. R&D expenditures are net of the R&D Tax Credit $(CIR)$ that represented income of EUR 0.1 million for the first half of 2024, as compared to EUR 0.3 million for the same period in 2023.

General and administrative expenses came to EUR 3.2 million for the first half of 2024, as compared to EUR 4.3 million for the corresponding period in 2023, reflecting in particular the savings plan undertaken by the Company.

The financial loss amounted to EUR 3.5 million for the first half of 2024, as compared to EUR 3.0 million for the first half of 2023. This was mainly due to the interests attached to the Company indebtedness.

The net loss for the financial period ending June 30, 2024, came to EUR 7.3 million, as compared to EUR 26.2 million for the same period in 2023.

The Company will publish its half-yearly financial report in the next few days. This report will include the statutory auditors' limited review reports on the consolidated financial statements for the six months ended June 30, 2024.

Significant reduction in cash runway in the absence of full residual drawdown of the equity-linked financing facility

As announced on September 30, 2024, following the non-dilutive financing agreement with OrbiMed, the Company extended its cash runway to the end of 2025, assuming the inclusion of the full residual drawdown of the equity-linked financing facility put in place with IRIS(3) , the latter assuming that the Company has the necessary financial delegations at the time of drawdown and conversion of the ORANE.

The non-adoption of most of the financial delegations at the Annual General Meeting on November 28, 2024, and, in particular, the one relating to the issue of new shares in redemption of ORANE, which was intended to replace a similar delegation due to expire on December 20, 2024, entails, in accordance with the agreements entered into with IRIS and IPF Partners respectively, the redemption of the ORANE held by IRIS, the latter also results in the redemption of the IPF Partners bonds, unless a new Extraordinary General Meeting, convened no later than 63 days from the date of notification of the Company's failure to deliver new shares, adopts a resolution renewing the delegation necessary for the continued redemption of the ORANE in shares.

Despite the recent restructuring of the Company's debt made possible in particular by the monetization transaction with OrbiMed, which extended Poxel's cash runway to the end of 2025, the non-adoption of most financial delegations, and in particular that relating to the issue of new shares in redemption of ORANE, but also including more usual delegations for biotechnology companies willing to raise capital, places the Company, as well as its shareholders, in an unprecedented, uncertain and potentially very negative situation for the pursuit of its activities.

In particular, the non-adoption of the delegation allowing the issue of shares in redemption of ORANE held by IRIS for a total amount, to date, of EUR 4.3 million or that may still be issued in the event of the draw down of additional ORANE from IRIS (i.e. EUR 3.2 million) under the equity-linked financing program signed by Poxel with IRIS in August 2022 and renewed in March 2023, significantly affects the Company's cash flow forecasts and its ability to continue as a going concern.

In this context, and based on the cash position as of September 30, 2024, amounted to EUR 13.1 million and taking into account the following financial items affecting the Company's financial situation:

(i) partial repayments of the PGE loans according to the new schedule agreed upon as part of the Company's debt restructuring with its creditors;

(ii) advisory fees incurred in the framework of the transaction concluded with OrbiMed; and

(iii) the anticipated business plan including strict control of operating expenses,

the Company now expects to be able to finance its operations and capital expenditures only until the end of the 1(st) quarter of 2025, at which point it would no longer be able to meet its expenses if the current situation is not resolved.

Significant additional financial risk

In the event of non-fulfilment by the Company of its obligation to deliver shares following a request for conversion of ORANE by IRIS resulting from an absence of financial authorization, IRIS may request, in accordance with the terms of the contract of issuance, the early redemption of all outstanding ORANE, i.e. EUR 4.3 million to date, unless the Company holds an Extraordinary General Meeting within 63 days of notification by IRIS of the failure to deliver shares and obtains the approval of the resolution to remedy the situation.

The failure by such an Extraordinary General Meeting to adopt a new authorization to redeem ORANE in shares would result in the ORANE becoming immediately redeemable.

In the event of non-adoption of this authorization, and in the absence of an agreement with IRIS and IPF Partners respectively, the latter would also have the right under the terms of the agreements relating to its bonds to impose its immediate redemption for an amount of EUR 17.1 million(4) to date (including EUR 13 million in principal and EUR 4.1 million in exit fees).

In this case, the Company would not have the cash required to meet its anticipated redemption obligations, which would significantly compromise its ability to continue as a going concern and the continuation of its activities.

Convening of a new General Meeting aimed at adopting new financial delegations and resolutions relating to the compensation policy for corporate officers

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December 09, 2024 01:30 ET (06:30 GMT)