Notes Secured by Royalties on U.S. Sales of SANCTURA(R) and SANCTURA XR(TM)
LEXINGTON, Mass., Aug. 26 /PRNewswire-FirstCall/ -- Indevus Pharmaceuticals, Inc. (Nasdaq: IDEV) announced today that it has closed a private placement to institutional investors of $105.0 million of non-recourse notes (the "Notes"). The Notes are secured by royalties to be paid from sales in the United States of SANCTURA(R) and SANCTURA XR(TM) (trospium chloride). SANCTURA and SANCTURA XR are marketed in the U.S. by Allergan, Inc. for the treatment of overactive bladder (OAB).
"This transaction reflects the successful execution of our plan to improve our balance sheet with non-dilutive financing," said Michael W. Rogers, chief financial officer of Indevus. "With the proceeds from this transaction, we expect to have sufficient cash to retire our outstanding convertible notes, due in July of 2009, and to fund the Company's operations into calendar 2010. In addition, once the Notes are repaid, all royalties will revert to Indevus, thereby providing Indevus with a significant participation in the future royalty stream of the product. Importantly, this transaction does not cover royalties on SANCTURA XR that we expect to receive on sales in Europe and other territories around the world."
The Notes will bear interest at 16% per annum payable quarterly
beginning November 5, 2008. All excess royalties, after paying interest,
administrative fees, and applicable tax distributions, will be applied to
the principal of the Notes until the Notes have been paid in full. From the
proceeds of the transaction, Indevus will establish a $10.0 million
interest reserve account to cover any potential shortfall in interest
payments. After two years, any remaining funds
|SOURCE Indevus Pharmaceuticals, Inc.|
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