Obviously both groups had a lot of confidence to use the rights of QS-21 as collateral to a loan and not dilute shareholders. Shares should rebound sharply.
In return for $100 million at closing to Agenus, Oberland Capital will have the right to receive 100% of Agenus’ rights to the worldwide royalties on sales of GlaxoSmithKline’s (GSK) shingles (HZ/su) and malaria (RTS,S) prophylactic vaccine products that contain QS-21 adjuvant until all principal and interest on the loan has been paid.
At its option, Agenus will receive an additional $15 million in cash after approval of HZ/su by the Food and Drug Administration (FDA), provided such approval does not occur later than June 30, 2018. Also at its option, Agenus has the right to buy back the loan at any time under pre-specified terms.
“This financing allows us to monetize a significant share of the value of our QS-21 platform while allowing us to retain any upside remaining after the loan terms are satisfied. This transaction will provide non-dilutive funding towards executing on our strategic and operational goals,” said Dr. Garo Armen, Ph.D., Chairman and Chief Executive Officer of Agenus.