TARRYTOWN, N.Y., Aug. 27, 2013 /PRNewswire/ -- Immune Pharmaceuticals Inc. (Nasdaq OMX Stockholm Exchange: IMNP and OTCQX: EPCTD) ("Immune" or the "Company") announced today that it has executed the Third Amendment and Consent to the Loan and Security Agreement between the Company and MidCap Funding III, LLC ("MidCap"). This amendment restructures the loan in connection with the completed merger of Immune Pharmaceuticals Ltd. and EpiCept Corporation.
As a condition to the effectiveness of the amendment, Immune was required to have raised at least $1 million in unrestricted net cash proceeds in connection to the merger. Immune has received $4.3 million since the beginning of 2013 through various transactions in order to fund the associated merger costs and the on-going operations of both Immune Pharmaceuticals Ltd. and EpiCept through the merger closing, and therefore this important condition has been met. Additionally, Immune Ltd. completed in March 2013 an investment of $0.5 million in EpiCept equity at a split-adjusted price of $5.20 per share.
"With the execution of this amendment, we have met yet another important milestone for Immune," stated Daniel Teper, Immune's Chairman and Chief Executive Officer. "We are pleased that we have been able to reach a favorable agreement with MidCap, one which will enable the Company to remain focused on the commencement of the clinical studies of bertilimumab in ulcerative colitis and bullous pemphigoid, as well as our development of the NanomAb® program and the outlicensing of AmiKet™. The amendment allows us to concentrate the bulk of our resources on reaching important development milestones over the next 12-18 months."
In addition to providing MidCap's consent to the merger, the amendment fixed the principal balance of the Tranche 1 amount of the loan at approximately $4.4 million. Principal repayments on the Tranche 1 amount will commence June 1, 2014, if Immune raises net cash proceeds of $5.0 million or more by November 15, 2013; otherwise principal repayments on the Tranche 1 amount will commence on December 1, 2013. Principal repayments will be due in approximately equal monthly installments commencing on the first repayment date. The scheduled maturity date of the loan is August 1, 2016.
The amendment also provides for a Tranche 2 amount of $1 million, which will be available for drawing by the Company through August 1, 2014, at the Company's discretion, upon meeting certain conditions, most importantly the raising of net cash proceeds of at least $17.5 million through one or more qualifying transactions, as defined in the amendment. Repayment of the Tranche 2 amount will be in approximately equal monthly payments, ending on the maturity date of the Tranche 1 loan. Interest on the Tranche 1 and Tranche 2 loans will accrue at the rate of 11.5% per annum and will be paid monthly in arrears.
In connection with the restructuring of the loan, the Company has granted to MidCap five-year warrants to purchase 101,531 shares of the Company's common stock at $3.50 per share. Warrants to purchase additional shares of the Company's common stock will be issuable if the Tranche 2 amount is drawn. The number of shares and the exercise price of the additional warrants will be based on the market price of the Company's stock at the time of the drawing.
About Immune Pharmaceuticals Inc.
Immune Pharmaceuticals Inc. (Nasdaq OMX Stockholm Exchange: IMNP; OTCQX: EPCTD,) applies a personalized approach to treatment, developing novel, highly targeted antibody therapeutics to improve the lives of patients with inflammatory diseases and cancer. The Company's lead product candidate, bertilimumab, is entering Phase II clinical studies for moderate-to-severe ulcerative colitis and bullous pemphigoid, with additional studies planned for Crohn's disease and severe asthma. The Company is evaluating the use of its NanomAb® platform, a second generation antibody drug conjugate technology, with chemotherapeutics in order to enhance their safety and efficacy profiles by delivering the medicines directly to cancer cells. The Company's growing oncology pipeline also includes proprietary antibodies and, clinical-stage small molecules that have been shown activity in a variety of solid tumors.
Immune is headquartered in the U.S., with its primary research and development facilities in Israel.
For more information, visit Immune's website at www.immunepharmaceuticals.com.
This news release and any oral statements made with respect to the information contained in this news release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You are urged to consider statements that include the words "may," "will," "would," "could," "should," "believes," "estimates," "projects," "potential," "expects," "plans," "anticipates," "intends," "continues," "forecast," "designed," "goal" or the negative of those words or other comparable words to be uncertain and forward-looking. Such forward-looking statements include statements that express plans, anticipation, intent, contingency, goals, targets, future development and are otherwise not statements of historical fact. These statements are based on our current expectations and are subject to risks and uncertainties that could cause actual results or developments to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. Factors that may cause actual results or developments to differ materially include: the risks associated with the adequacy of our existing cash resources and our ability to continue as a going concern; the risks associated with our ability to continue to meet our obligations under our existing debt agreements; the risk that clinical trials for bertilimumab, crolibulin or AmiKet™ will not be successful; the risk that bertilimumab, crolibulin, AmiKet™ or compounds arising from our NanomAb® program will not receive regulatory approval or achieve significant commercial success; the risk that we will not be able to find a partner to help conduct the Phase III trials for AmiKet™ on attractive terms, a timely basis or at all; the risk that our other product candidates that appeared promising in early research and clinical trials do not demonstrate safety and/or efficacy in larger-scale or later-stage clinical trials; the risk that we will not obtain approval to market any of our product candidates; the risks associated with dependence upon key personnel; the risks associated with reliance on collaborative partners and others for further clinical trials, development, manufacturing and commercialization of our product candidates; the cost, delays and uncertainties associated with our scientific research, product development, clinical trials and regulatory approval process; our history of operating losses since our inception; the highly competitive nature of our business; risks associated with litigation; and risks associated with our ability to protect our intellectual property. These factors and other material risks are more fully discussed in our periodic reports, including our reports on Forms 8-K, 10-Q and 10-K and other filings with the U.S. Securities and Exchange Commission. You are urged to carefully review and consider the disclosures found in our filings which are available at www.sec.gov or at www.immunepharmaceuticals.com. You are cautioned not to place undue reliance on any forward-looking statements, any of which could turn out to be wrong due to inaccurate assumptions, unknown risks or uncertainties or other risk factors.
SOURCE Immune Pharmaceuticals Inc.