Societal CDMO Announces Signing of More Than $9 Million Sales and Purchase Agreement With David Weekley Homes for Excess Lakefront Land
16 August 2022 - 9:00PM
Societal CDMO, Inc. (“Societal CDMO”; NASD: SCTL), a contract
development and manufacturing organization (CDMO) dedicated to
solving complex formulation and manufacturing challenges primarily
in small molecule therapeutic development, today announced that it
has signed a sales and purchase agreement to sell approximately 121
acres of lakefront land to David Weekley Homes, an established
homebuilder, for $9,075,000.00. The land is located adjacent to
Societal’s manufacturing facility in Gainesville, Georgia, and is
being sought by David Weekley Homes, which operates in 19 cities
across the U.S., for residential development. The closing of the
sale is subject to completion of standard due diligence and other
customary conditions. Subject to completion of diligence, Societal
CDMO expects the sale to close in the second half of 2023 and
intends to use the proceeds from the sale to strengthen its balance
sheet by paying down a portion of its outstanding debt.
“A core component of Societal’s forward-looking
growth strategy is the continuous strengthening of our balance
sheet to provide the company the sturdiest foundation from which to
operate. Our ownership of these approximately 121 acres of
lakefront property provides Societal CDMO the unique opportunity to
monetize a valuable, non-core business asset and utilize the
capital that is generated to offset a portion of the company’s
debt,” said Ryan Lake, chief financial officer of Societal CDMO.
“We believe that this is a particularly prudent move in light of
the challenging economic environment that is currently impacting
not only those in the life sciences industry but the broader global
market. We look forward to the closing of this transaction and
continuing to execute against our broader corporate growth
strategy.”
Societal CDMO is also in the process of pursuing
a second real estate transaction intended to further strengthen the
company’s financial position. This second transaction is focused on
the sale and lease back of its buildings and a portion of the
company’s remaining land on its Gainesville campus. Discussions
with prospective buyers are advancing and the company is aiming to
close the sale and lease back deal by the end of 2022. The company
expects the total proceeds from both real estate transactions to be
between $40 million and $50 million, and intends to utilize these
proceeds to reduce its debt and significantly improve its debt
capital structure, putting the company on a path toward
refinancing the debt at a lower cost of capital.
About Societal CDMOSocietal
CDMO (NASDAQ: SCTL) is a bi-coastal contract development and
manufacturing organization (CDMO) with capabilities spanning
pre-Investigational New Drug (IND) development to commercial
manufacturing and packaging for a wide range of therapeutic dosage
forms with a primary focus in the area of small molecules. With an
expertise in solving complex manufacturing problems, Societal CDMO
is a leading CDMO providing therapeutic development, end-to-end
regulatory support, clinical and commercial manufacturing, aseptic
fill/finish, lyophilization, packaging and logistics services to
the global pharmaceutical market.
In addition to our experience in handling DEA
controlled substances and developing and manufacturing
modified-release dosage forms, Societal CDMO has the expertise to
deliver on our clients’ pharmaceutical development and
manufacturing projects, regardless of complexity level. We do all
of this in our best-in-class facilities, which total 145,000 square
feet, in Gainesville, Georgia and San Diego, California.
Societal CDMO: Bringing Science to Society. For
more information about Societal CDMO’s customer solutions, visit
societalcdmo.com.
Forward-Looking StatementsThis
press release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. These statements, among
other things, relate to the completion of the transactions
contemplated by the purchase and sale agreement, the anticipated
timing and benefits thereof and the company’s anticipated use of
proceeds therefrom, as well as the company’s plans to pursue
additional real estate transactions. The words “anticipate”,
“believe”, “could”, “estimate”, “upcoming”, “expect,”, “intend”,
“may”, “plan”, “predict”, “project”, “will” and similar terms and
phrases may be used to identify forward-looking statements in this
press release. Our operations involve risks and uncertainties, many
of which are outside our control, and any one of which, or a
combination of which, could materially affect our results of
operations and whether the forward-looking statements ultimately
prove to be correct. Factors that could cause the company’s actual
outcomes to differ materially from those expressed in or underlying
these forward-looking statements include the risk that the
transaction may not be completed in a timely manner or at all; the
risk of failure to satisfy the conditions to the consummation of
the transactions or the occurrence of any event, change or other
circumstance that could give rise to the termination of the
purchase and sale agreement; the effect of the announcement or
pendency of the transaction on the company’s business
relationships, operating results and business generally; risks and
uncertainties associated with the ongoing economic and social
consequences of the COVID-19 pandemic, including any adverse impact
on the customer ordering patterns or inventory rebalancing or
disruption in raw materials or supply chain; the company’s ability
to regain, and maintain, compliance with the Nasdaq continued
listing standards; demand for the company’s services, which depends
in part on customers’ research and development and the clinical
plans and market success of their products; customers’ changing
inventory requirements and manufacturing plans; customers and
prospective customers decisions to move forward with the company’s
manufacturing services; the average profitability, or mix, of the
products the company manufactures; the company’s ability to enhance
existing or introduce new services in a timely manner; fluctuations
in the costs, availability, and suitability of the components of
the products the company manufactures, including active
pharmaceutical ingredients, excipients, purchased components and
raw materials, or the company’s customers facing increasing or new
competition; the company’s ability to collect on customers’
receivable balances; and risks that the results of the combination
of IriSys LLC’s business with the company's business may not be as
anticipated. These forward-looking statements should be considered
together with the risks and uncertainties that may affect our
business and future results presented herein along with those risks
and uncertainties discussed in our filings with the Securities and
Exchange Commission at www.sec.gov. These forward-looking
statements are based on information currently available to us, and
we assume no obligation to update any forward-looking statements
except as required by applicable law.
Contacts:
Stephanie Diaz (Investors)
Vida Strategic Partners
415-675-7401
sdiaz@vidasp.com
Tim Brons (Media)
Vida Strategic Partners
415-675-7402
tbrons@vidasp.com
Ryan D. Lake (CFO)
Societal CDMO
770-531-8365
ryan.lake@societalcdmo.com
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