Theratechnologies Announces Agreement in Principle with Marathon to Amend Some of the Terms and Conditions of its Loan Facility
25 September 2023 - 1:30PM
Theratechnologies Inc. (“Theratechnologies” or the “Company”) (TSX:
TH) (NASDAQ: THTX), a biopharmaceutical company focused on the
development and commercialization of innovative therapies, today
announced that it has reached an agreement in principle to amend
some of the terms and conditions of its credit agreement dated July
20, 2022, as amended from time to time (the “Loan Facility”), with
certain funds and accounts for which Marathon Asset Management,
L.P. acts as investment manager (collectively, “Marathon”).
The Company and Marathon agreed in principle to
make the following amendments to the terms and conditions of the
Loan Facility:
- to remove the
obligation to maintain at all times liquidity in the amount of
US$30 million if the F8 formulation of tesamorelin is not approved
by the United States Food and Drug Administration (“FDA”) by March
31, 2024;
- to decrease the
minimum liquidity requirements over time to a minimum of US$15
million from US$20 million based on targeted last twelve months
adjusted EBITDA;
- to move to an
adjusted EBITDA-based target from a quarterly revenue-based target
beginning with the quarter ending November 30, 2023; and
- to delete from
the Loan Facility the prohibition for the Company to have a going
concern explanatory paragraph in the annual report of the
independent registered public accounting firm of the Company.
In consideration of the proposed amendments, the
Company has agreed to (i) pay an amount equal to US$600,000, or 100
basis points calculated on the funded debt as of this day (US$60
million), over the term of the loan and added to the outstanding
loan as payment in kind; and (ii) reprice the exercise price of the
common share purchase warrants (the “Warrants”) held by Marathon to
US$2.30 per share from US$5.80 per share. Following the share
consolidation completed on July 31, 2023, the exercise of four
Warrants is required to purchase 1 common share of
Theratechnologies, resulting in a maximum issuance of 1,250,000
common shares. The Warrants can be exercised until
February 27, 2030.
The repricing of the Warrants is conditional
upon the approval of the Toronto Stock Exchange and the final terms
of these amendments, including the definition of “adjusted EBITDA”,
remain subject to the completion of all the legal documentation to
the satisfaction of both the Company and Marathon.
The amendments to the Loan Facility are expected
to be executed on or about October 10, 2023.
About Theratechnologies
Theratechnologies (TSX: TH) (NASDAQ: THTX) is a biopharmaceutical
company focused on the development and commercialization of
innovative therapies addressing unmet medical needs. Further
information about Theratechnologies is available on the Company's
website at www.theratech.com, on SEDAR at www.sedarplus.ca and on
EDGAR at www.sec.gov.
Forward-Looking Information This press release
contains forward-looking statements and forward-looking information
(collectively, the “Forward-Looking Statements”), within the
meaning of applicable securities laws, that are based on our
management’s beliefs and assumptions and on information currently
available to our management. You can identify Forward-Looking
Statements by terms such as "may", "will", "should", "could",
“promising”, “would”, "outlook", "believe", "plan", "envisage",
"anticipate", "expect" and "estimate", or the negatives of these
terms, or variations of them. The Forward-Looking Statements
contained in this press release include, but are not limited to,
statements regarding changes to the terms and conditions of our
Loan Facility expected to be reflected in a final binding agreement
with Marathon and the impact such changes are expected to have,
including on our ability to reach our key financial objectives and
in particular the objective of reporting a positive “Adjusted
EBITDA” by the end of our current fiscal year. Although the
Forward-Looking Statements contained in this press release are
based upon what the Company believes are reasonable assumptions in
light of the information currently available, investors are
cautioned against placing undue reliance on this information since
actual results may vary from the forward-looking information.
Certain assumptions made in preparing the Forward-Looking
Statements include that: the Company will be able to finalize the
legal documentation giving effect to the agreement in principal
relating to the changes to the terms and conditions of our Loan
Facility with Marathon, sales of our products will continue to grow
in the United States, no event will occur that would adversely
impact the “Adjusted EBITDA”, and we will not breach any of the
terms and conditions of the credit agreement. Forward-Looking
Statements are subject to a number of risks and uncertainties, many
of which are beyond Theratechnologies’ control that could cause
actual results to differ materially from those that are disclosed
in or implied by such Forward-Looking Statements. These risks and
uncertainties include, but are not limited to, those related to or
arising from: a delay in the finalization of the legal
documentation giving effect to the agreement in principal relating
to the changes to the terms and conditions of our Loan Facility
with Marathon or the inability to finalize such documentation,
non-compliance by the Company with the terms and conditions of the
credit agreement; a change in regulations; product recalls;
unanticipated chargebacks and rebates having an adverse impact on
net revenues and the “Adjusted EBITDA”. We refer current and
potential investors to the “Risk Factors” section of our Annual
Information Form dated February 27, 2023, available on SEDAR at
www.sedarplus.ca and on EDGAR at www.sec.gov as an exhibit to our
report on Form 40-F dated February 28, 2023, under
Theratechnologies’ public filings for additional risks involved in
our business. The reader is cautioned to consider these and other
risks and uncertainties carefully and not to put undue reliance on
Forward-Looking Statements. Forward-Looking Statements reflect
current expectations regarding future events and speak only as of
the date of this press release and represent our expectations as of
that date.
We undertake no obligation to update or revise
the information contained in this press release, whether as a
result of new information, future events or circumstances or
otherwise, except as may be required by applicable law.
Contacts:
Investor Inquiries:Philippe Dubuc Senior Vice
President and Chief Financial Officer
pdubuc@theratech.com438-315-6608
Media Inquiries:Julie SchneidermanSenior
Director, Communications & Corporate
Affairscommunications@theratech.com1-514-336-7800
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