- Original commercialization and supply agreement amended following global divestment of XIIDRA®
- SIMBRINZA® remains under Valeo Pharma exclusive promotion and distribution
- Proceeds from reimbursement to be used for debt reduction purposes
- Sagard credit facility amended to provide for early repayments and liquidity requirements in fiscal 2024
MONTREAL, QUEBEC, February 2, 2024 – Valeo Pharma Inc. (TSX: VPH, OTCQB: VPHIF, FSE: VP2) (“Valeo”), a Canadian pharmaceutical company, announced today that it has entered into an amendment (the “Amendment”) of its 7-year Commercialization and Supply Agreement (the “Commercializationand Supply Agreement”) of XIIDRA® and SIMBRINZA® originally entered into with Novartis Pharmaceuticals Canada Inc. (“Novartis”) in July 2022. For sake of clarity SIMBRINZA® is a registered trademark of Novartis AG while XIIDRA® is a registered trademark of Bausch and Lomb. The use of both trademarks has been authorized only in the context of this press release.
As per the Amendment, Valeo will continue to distribute XIIDRA® for the entire transition period, until certain regulatory transfers have been received by the XIIDRA® global purchaser (‘’Effective Date of Termination”). The transition period is expected to continue until approximately Q3-2024.
Valeo will continue to commercialize and promote SIMBRINZA® on an exclusive basis as provided by the Commercial and Supply Agreement with Novartis.
Within 60 days from the Effective Date of Termination, Valeo will be entitled to a reimbursement of a residual portion of the upfront fee paid by Valeo at the time it entered into the Commercialization and Supply Agreement, such reimbursement will be offset by a financial reconciliation with Novartis (the “Reimbursement”). The amount to be received as Reimbursement, when received, will be used for partial repayment of the Secured Term Loan (the “Facility’’) entered into between Valeo and Sagard Healthcare Royalty Partners, LP (“Sagard”) in July 2022.
Valeo also announced that it has entered into an agreement with Sagard which is amending the Facility (the “Sagard Amendment”), to provide, among other things, for accelerated debt repayment of the Facility. Under the Sagard Amendment, Valeo will be required to make a first repayment of $10 million by August 31, 2024 (the “First Repayment”). Under the Sagard Amendment, Valeo will have the option (the “Repayment Option”) at its discretion until August 31, 2024, to make an additional repayment of US$5 million under the Facility, which amount is currently held in a restricted cash account. Both repayments will be subject to contractually agreed prepayment and exit fees. In addition, under the Sagard Amendment, if Valeo elects to proceed with the Repayment Option, the minimum liquidity and cash balance requirements under the Facility have been set at $2 million in cash or cash equivalents.
During the fourth quarter 2023 analyst call held on Tuesday January 30, 2024, Mr. Steve Saviuk, the Chief Executive Officer of Valeo, mentioned that the Reimbursement would be expected to be redeployed to other revenue generating ophthalmology assets. It should be noted that the net amount to be received as Reimbursement will not be used for the acquisition of new ophthalmology assets but will be used to fund a portion of the First Repayment.
About Valeo Pharma Inc.
Valeo Pharma is a Canadian pharmaceutical company dedicated to the commercialization of innovative prescription products in Canada with a focus on Respiratory/Allergy, Ophthalmology and Hospital Specialty Products. Headquartered in Kirkland, Quebec, Valeo Pharma has all the required capabilities and the full infrastructure to register and properly manage its growing product portfolio through all stages of commercialization. For more information, please visit www.valeopharma.com and follow us on LinkedIn and Twitter.
Forward Looking Statements
Forward-looking statements are statements and information regarding possible events, conditions or results of operations that are based upon assumptions about future economic conditions and courses of action. All statements and information other than statements of historical fact may be forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as “seek”, “expect”, “anticipate”, “budget”, “plan”, “estimate”, “continue”, “forecast”, “intend”, “believe”, “predict”, “potential”, “target”, “may”, “could”, “would”, “might”, “will” and similar words or phrases (including negative variations) suggesting future outcomes or statements regarding an outlook.
Forward-looking statements in this press release include, but are not limited to, statements and information regarding Valeo’s activities during the transition period, the duration of the transition period, the timing for the Effective Date of Termination to occur, the timing for the receipt of the Reimbursement from Novartis and the use of proceeds thereof, Valeo continuing to commercialize SIMBRINZA®, the occurrence of the First Repayment, and the exercise and timing of the Repayment Option. Such forward-looking statements are based on a number of material factors and assumptions, including, but not limited to our ability to carry on development activities, the timely receipt of required approvals and our ability to obtain financing as and when required and on reasonable terms.
Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from those expressed or implied by such forward-looking information, including but not limited to: reliance on third-party suppliers and manufacturers, the availability of additional funding, common risks for pharmaceutical products, including product liability claims, insurance and recalls, registration risks in certain jurisdictions, the inability to implement Valeo’s strategy to grow the business, dependence on key management personnel and executives, competition, currency fluctuations and the risks, uncertainties and other factors contained in the section entitled “Risk Factors” in Valeo’s annual information form dated January 29, 2024, a copy of which is available on Valeo’s Sedar+ profile at www.sedarplus.ca.
Actual events or results may differ materially from those anticipated in these forward-looking statements if known or unknown risks affect Valeo’s business, or if Valeo’s estimates or assumptions turn out to be inaccurate. Valeo undertakes no obligation to update publicly, or otherwise revise, any forward-looking statements, whether as a result of new information or future events or otherwise, except as may be required by law. If Valeo does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements, unless required by law.
For more information:
Director, Communications and Investor Relations 514-693-8847