HALIFAX, Nova Scotia– Appili Therapeutics Inc. (TSX: APLI; OTCQX: APLIF) (the “Company” or “Appili”), a biopharmaceutical company focused on drug development for infectious diseases, today announced that it has entered into a senior secured loan and exclusive license and distribution agreement (the “Agreement”) with Long Zone Holdings Inc. (“LZH”), led by Jonathan Ross Goodman, founder of both Paladin Labs Inc. and Knight Therapeutics Inc. (TSE: GUD). The US$3.6 million senior secured loan will be used by Appili to retire the previously announced senior convertible funding agreement with The Lind Partners and for working capital purposes.
Under the terms of the Agreement, LZH will issue a secured loan of US$3.6 million bearing a minimum interest rate of 8.5% per year, compounded quarterly, with a maturity date of March 28, 2025. Appili expects to receive net proceeds of approximately US$3.5 million from the funding (after deducting aggregate fees of US$108,000, including in respect of a work fee and origination fee payable to LZH). LZH will also be issued 1,500,000 cash-exercise warrants, exercisable for seven years, with a warrant exercise price of C$0.115, equal to the 5-day volume weighted average price (“VWAP”) immediately prior to execution of the Agreement.
In addition, Appili shall grant LZH an exclusive license to commercialize Appili’s future approved products in Latin America, Canada, and Israel (collectively, the “Territory”), excluding ATI-1501 in Latin America, which was recently licensed to existing partner Saptalis Pharmaceuticals. Appili will receive a supply price for products sold by LZH or its sublicensees, as well as royalties on net sales.
“We are excited to announce this non-dilutive funding agreement and partnership to help advance our pipeline and, ultimately, bring our products to the Canadian, Israeli, and Latin American markets,” said Dr. Armand Balboni, Chief Executive Officer, Appili Therapeutics. “Infectious diseases are a global threat and the funding from LZH, in addition to over US$10 million in expected non-dilutive funding from the US Department of Defense, help bring Appili that much closer to delivering its portfolio of innovative medicines to patients around the world.”
The loan will be secured against all of the assets and property of the Company pursuant to a general security agreement. The transaction contemplated under the Agreement has been conditionally approved by the Toronto Stock Exchange.
“Appili is focused on some of the most challenging infectious disease threats in the world, as evidenced by the fact that two of Appili’s programs in development will, if approved by the FDA, be eligible to receive a Priority Review Voucher. Priority Review Vouchers have sold for as low as US$67 million and as high as US$350 million. Knight was blessed to sell its Priority Review Voucher for US$125 million to Gilead in November 2014. We are excited to partner with Appili to help address these urgent unmet public health needs while creating significant shareholder value in the process,” said Jonathan Ross Goodman, Long Zone Holdings Inc.
