Item 1.01 Entry into a Material Definitive Agreement.
Dermal Filler License Agreement
On May 9, 2023, Evolus, Inc. (the “Company”) and Symatese S.A.S (“Symatese”), entered into a License, Supply and Distribution Agreement (the “Agreement”), pursuant to which Symatese granted to the Company an exclusive right to commercialize and distribute its five dermal filler product candidates,which are referred to as: (i) Lift; (ii) Smooth; (iii) Sculpt; (iv) Lips; and (v) Eye (each, a “Product” and collectively, the “Products”) in the United States for use in the aesthetics and dermatological fields (the “Field”). The Company also has the right of first negotiation to obtain a license from Symatese to commercialize and distribute any new products developed using the same technology as the Products in the Field in the United States.
As consideration for the rights granted under the Agreement, the Company is required to make up to €16.2 million in milestone payments to Symatese, including an initial payment of €4.1 million within 30 days of execution of the Agreement, and additional annual payments of €1.6 million in June 2025, €4.1 million in June 2026, €3.2 million in June 2027, and €3.2 million in June 2028, in each case subject to three of the Products gaining approval prior to that date. The Agreement is also subject to minimum purchase requirements, and failure to meet such requirements may result in a reduction or termination of the Company’s exclusive rights, subject to certain exceptions. Additionally, the Company has agreed to a specified cost-sharing agreement related to the registration of the Lips and Eye Products with the FDA.
The initial term of the Agreement is fifteen (15) years from the first FDA approval of a Product, with automatic renewals for successive five (5)-year terms subject to the terms of the Agreement.
The Agreement contains various representations and warranties, covenants and other provisions that are customary for a transaction of this nature. The representations, warranties and covenants contained in the Agreement were made only for purposes of the Agreement and as of specific dates, were solely for the benefit of the parties to the Agreement, and may be subject to limitations agreed upon by the parties. The representations and warranties may have been made for the purposes of allocating contractual risk between the parties to the Agreement instead of establishing these matters as facts.
The foregoing is a summary of the terms of the Agreement and is qualified in its entirety by reference to the Agreement, a copy of which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the Quarter ended June 30, 2023.
Amendment to Pharmakon Debt Facility
On May 9, 2023, the Company entered into a Third Amendment to Loan Agreement (the “Third Amendment”) with BPCR Limited Partnership (as a “Lender”), BioPharma Credit Investments V (Master) LP (as a “Lender” and, together with BPCR Limited Partnership, the “Lenders”), and Biopharma Credit PLC, as collateral agent for the Lenders (in such capacity, the “Collateral Agent”), which amends certain terms of the Loan and Security Agreement, dated December 14, 2021, as amended, by and among the Company, Lenders, and Collateral Agent (the “Loan Agreement”).
The Third Amendment provides that, subject to the terms of the Loan Agreement, as amended, the Lenders will advance the second tranche of $50.0 million to the Company in two installments: (i) $25.0 million to be advanced on May 31, 2023 and (ii) $25.0 million to be advanced on December 15, 2023.
The Third Amendment increases the interest only period under the Loan Agreement by 12 months, after which the Company shall make seven equal quarterly amortizing payments each in an amount equal to 1/12th of the outstanding principal amount of the loan. The Company shall pay the remaining principal of the loan on the maturity date.
The Third Amendment permits the Company to obtain an additional $15.0 million line of credit with another party secured by portions of the Company's working capital.
The Third Amendment also amended the Loan Agreement to replace the interest rates based on London Interbank Offering Rate (LIBOR) with interest rates based on the Secured Overnight Financing Rate (“SOFR”) throughout the Loan Agreement.
The foregoing is a summary of the terms of the Third Amendment and is qualified in its entirety by reference to the Third Amendment, a copy of which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ending June 30, 2023.