AxoGen, Inc. (AxoGen) (OTCBB: AXGN), and PDL BioPharma, Inc. (PDL) (NASDAQ: PDLI), announced today that they closed a structured financing transaction on October 5, 2012 in which PDL provided AxoGen with an aggregate of $20.8 million. AxoGen is a regenerative medicine company dedicated to advancing the science and commercialization of surgical solutions for peripheral nerve repair.
This financing allows AxoGen to strengthen and accelerate its sales and marketing efforts as well as to explore pipeline opportunities.
The total financing of $20.8 million was provided pursuant to a Revenue Interests Purchase Agreement that included $19.05 million in cash PDL paid to AxoGen on October 5, 2012 and $1.75 million PDL paid to AxoGen on August 14, 2012 pursuant to an Interim Revenue Interest Purchase Agreement. Aggregate net proceeds were approximately $14.0 million after repayment of $5.0 million in existing debt and payment of transaction related fees and expenses. The Revenue Agreement has an eight year term and provides PDL with royalties based on AxoGen revenues, subject to certain minimum payment requirements beginning in the fourth quarter of 2014 and the right to require AxoGen to repurchase the revenue contract at the end of the fourth year. AxoGen has been granted certain rights to call the revenue contract in years five through eight. In addition, John McLaughlin, President and Chief Executive Officer of PDL, was elected to the Board of Directors of AxoGen, Inc. immediately following the closing. No equity securities or warrants were issued as part of this transaction.
“PDL is an exciting partner for AxoGen. The PDL team has a strong track record of creating commercial value and their knowledge will be an asset as we build AxoGen’s business,” said Karen Zaderej, CEO for AxoGen.“The PDL transaction provided both operating capital and the ability to pay off AxoGen’s existing bank debt,” offered Greg Freitag, AxoGen’s CFO and General Counsel. “We were able to raise significant capital without diluting our outstanding share-base while maintaining a clean capital structure. Furthermore, our agreement provides extensive flexibility for future financing and business development activity.”