ERYTECH Provides Business and Financial Update for the First
Quarter of 2023
ERYTECH Provides
Business and Financial
Update for the
First Quarter of
2023
-
Combination with Pherecydes,
intending to
create a
global leader
in extended
phage
therapies to
target antimicrobial
resistant pathogenic
bacteria to be submitted
to shareholders' vote in June 2023
- Cash and
cash equivalents of €30.5 million
($33.7 million) at the end
of March 2023
Lyon (France) and
Cambridge (MA, US), May
9, 2023
– ERYTECH Pharma (Nasdaq
& Euronext: ERYP), a
clinical-stage biopharmaceutical company developing
innovative therapies by encapsulating therapeutic drug substances
inside red blood cells, today provided a
business and financial
update for the first
quarter of 2023.
“In February this year, we were pleased to
announce our strategic plans with Pherecydes, with the intent to
build a global leader in phage therapy and address the huge medical
need caused by antimicrobial resistance. We are now progressing
through the preparation steps for this merger, and, as our teams
have started intensive interactions in that respect, we already see
a remarkable match of our respective capabilities and prospects for
fruitful synergies.”, said Gil Beyen,
Chief
Executive
Officer of
ERYTECH. “The Management and Board of
ERYTECH are convinced that the strategic choice of combining with
Pherecydes and creating a champion in AMR is of the best interest
of ERYTECH and its stakeholders, and will be pleased to propose
this ambitious strategic move for approval to the Company’s
shareholders at the next General Assembly Meeting in June. For the
sake of transparency, we inform the market that ERYTECH was
recently contacted by a new shareholder, Akkadian Partners, who
shared with us its opposition to ERYTECH’s merger project with the
objective to conduct alternative acquisition projects through
ERYTECH. After due consideration by Management and the Board of
directors of ERYTECH, these alternative ideas were deemed not to be
in the best interest of ERYTECH and its stakeholders and certainly
not of sufficient robustness and value to distract the Company from
its strategic direction.”
Business Highlights
- Combination with Pherecydes
announced and merger process on track for
proposed closing in
June
On February 15, 2023, the Company announced the
strategic combination with Pherecydes, a biotechnology company
specializing in precision phage therapy to treat resistant and/or
complicated bacterial infections, with the ambition to create a
global leader in extended phage therapy and accelerate the
development of a portfolio of phage candidates targeting pathogenic
bacteria. This transaction is the result of the extensive strategic
review process announced by ERYTECH on several occasions since
November 2021.
The combination will draw on the complementary
expertise and resources of the two companies to accelerate the
development of a French phage therapy industry, aimed at combating
antibiotic resistance, a globally recognized health issue, and at
extending this technology to other therapeutic areas with
significant unmet medical needs.
ERYTECH and PHERECYDES intend to merge their
operations and relocate all teams to ERYTECH’s premises in Lyon,
where they will benefit from presence in a major European hub for
infectious diseases.
The proposed transaction is structured as a
merger of PHERECYDES into ERYTECH, pursuant to which the
shareholders of PHERECYDES would receive newly issued ERYTECH
ordinary shares in consideration of the contribution of the assets
and liabilities of PHERECYDES. The fairness of the exchange ratio
will be reviewed by a court-appointed independent appraiser
(commissaire à la fusion). His report will be made publicly
available prior to the extraordinary shareholders meeting of
ERYTECH and PHERECYDES, together with the required exemption
document in relation to the merger in accordance with applicable
laws.
The extraordinary general meetings of ERYTECH
and PHERECYDES shareholders will be called upon to vote on the
proposed merger, currently expected to be convened on June 23,
2023. The proposed transaction is expected to close shortly after
the approval by the shareholders.
This project is supported by the Boards of
Directors and major shareholders of ERYTECH and PHERECYDES.
On April 17, 2023, Akkadian Partners, an entity
domiciled in Luxembourg and acting on behalf of the Akkadian
Partners Fund, declared that on April 13, 2023, they crossed the
threshold of 5% of the share capital of ERYTECH Pharma and held
5.06% of the share capital and 4.83% of the voting rights of the
company.
On May 1st, 2023, Akkadian Partners informed the
Board of ERYTECH that they intended to oppose the project of
merging with Pherecydes and take de facto control of ERYTECH with a
view to pursue alternative acquisition projects with ERYTECH's
cash.
In that context, the Management and Board of
ERYTECH have reviewed and assessed the ideas of acquisitions
projects mentioned by Akkadian, with the assistance of external
financial and legal advisers. After due consideration, ERYTECH
determined that these ideas, were not in the best interest of
ERYTECH and its stakeholders, and remote from ERYTECH’s strategy
and identity, with significant uncertainty and risks associated
with these projects.
It is worth noting that Akkadian indicated that
they are committed to increase their stake in ERYTECH up to 15% of
the share capital in the short term and around 25% in the mid-term
(i.e., below the 30% threshold triggering the obligation to file a
mandatory tender offer on ERYTECH). Although Akkadian does not seem
to intend to acquire a controlling stake in ERYTECH, it requested
the appointment of 4 directors (and the resignation of 5 incumbent
directors) which would represent the majority of ERYTECH's Board.
Such attempt to gain de facto control of ERYTECH without filing a
tender offer on ERYTECH and without offering liquidity to minority
shareholders is hostile and will be strongly rejected. Note that
ERYTECH is not aware of any further acquisitions of ERYTECH shares
completed by Akkadian.
ERYTECH, while confirming its strategic decision
to merge with Pherecydes, will oppose any financial predation
project which would not be in the best interest of the company and
its stakeholders.
Update on Q1
2023 Financial Results and Cash
position
- As of March 31, 2023, ERYTECH had
cash and cash equivalents totaling €30.5 million (approximately
$33.7 million), compared with €38.8 million as of December 31,
2022. The €8.3 million net decrease in cash position during the
first quarter of 2023 was the result of a €7.5 million net cash
utilization in operating activities and investing activities,
including a one-off €1.2 million expense for restructuring and
pre-merger activities, and €0.6 million used in financing
activities, with the start of the scheduled repayment of the 2020,
€10 million government-guaranteed ‘Covid-19’ loan. The variation of
the U.S. dollar against the euro led to a €0.2 million negative
currency exchange impact.
- At the current stage of transition
activities in view of the proposed merger with Pherecydes, the
Company confirms its earlier guidance that its current cash
position can fund its current activities and planned operating
expenses to the second half of 2024.
- Given the ongoing preparation of
the announced business combination with Pherecydes, which includes
the preparation of proforma accounts and the review with market
regulators, the Company will not provide interim quarterly P&L
information for Q1 2023.
2023 Financial Calendar*
- Shareholders’ Meeting: June 23,
2023, at 9.30am CEST - Paris
- Business Update and Financial
Highlights for the Second Quarter & First Half of 2023:
September 11, 2023 (after U.S. market close), followed by a
conference call & webcast on September 12, 2023 (2:30pm
CET/8:30am ET)
- Business Update and Financial
Highlights for the Third Quarter of 2023: November 6, 2023 (after
U.S. market close), followed by a conference call & webcast on
November 7, 2023 (2:30pm CET/8:30am ET)
(*): Information subject to change.
About ERYTECH
ERYTECH is a biopharmaceutical company
developing innovative red blood cell-based therapeutics for severe
forms of cancer and orphan diseases. Leveraging its proprietary
ERYCAPS® platform, which uses a novel technology to encapsulate
drug substances inside red blood cells, ERYTECH is developing a
pipeline of product candidates for patients with high unmet medical
needs.
On February 15 2023, ERYTECH announced its
intended strategic combination with PHERECYDES to create a global
player in extended phage. More detail can be found in the press
release.
ERYTECH is listed on the Nasdaq Global Select
Market in the United States (ticker: ERYP) and on the Euronext
regulated market in Paris (ISIN code: FR0011471135, ticker: ERYP).
ERYTECH is part of the CAC Healthcare, CAC Pharma & Bio, CAC
Mid & Small, CAC All Tradable, EnterNext PEA-PME 150 and Next
Biotech indexes.
For more information, please visit
www.erytech.com
CONTACTS
ERYTECH
Eric SoyerCFO & COO |
NewCapMathilde Bohin / Louis-Victor
DelouvrierInvestor relationsNicolas
MerigeauMedia relations |
+33 4 78 74 44
38investors@erytech.com |
+33 1 44 71 94 94
erytech@newcap.eu |
Forward-looking information
This press release contains forward-looking
statements, forecasts and estimates with respect to the clinical
results from and the development plans of eryaspase, business and
regulatory strategy and anticipated future performance of ERYTECH
and of the market in which it operates. Certain of these
statements, forecasts and estimates can be recognized by the use of
words such as, without limitation, “believes”, “anticipates”,
“expects”, “intends”, “plans”, “seeks”, “estimates”, “may”, “will”
and “continue” and similar expressions. All statements contained in
this press release other than statements of historical facts are
forward-looking statements, including, without limitation,
statements regarding ERYTECH’s expectations with respect to effects
of the listing transfer of its ADSs to The Nasdaq Capital Market.
Such statements, forecasts and estimates are based on various
assumptions and assessments of known and unknown risks,
uncertainties and other factors, which were deemed reasonable when
made but may or may not prove to be correct. Actual events are
difficult to predict and may depend upon factors that are beyond
ERYTECH's control. Therefore, actual results may turn out to be
materially different from the anticipated future results,
performance or achievements expressed or implied by such
statements, forecasts and estimates. Important factors that could
cause actual results and outcomes to differ materially from those
indicated in the forward-looking statements include, among others,
the following: (1) market reaction to the transfer of the listing
of Erytech’s ADSs to The Nasdaq Capital Market; (2) the inability
to maintain the listing of ERYTECH’s shares on the Nasdaq Capital
Market and the Euronext regulated market; (3) changes in applicable
laws or regulations; (4) the possibility that ERYTECH may be
adversely affected by other economic, business and/or competitive
factors; and (5) other risks and uncertainties indicated from time
to time in ERYTECH’s regulatory filings. Further description of
these risks, uncertainties and other risks can be found in the
Company’s regulatory filings with the French Autorité des Marchés
Financiers (AMF), the Company’s Securities and Exchange Commission
(SEC) filings and reports, including in the Company’s 2022
Universal Registration Document (Document d’Enregistrement
Universel) filed with the AMF on March 28, 2023 and in the
Company’s Annual Report on Form 20-F filed with the SEC on March
28, 2023 and future filings and reports by the Company. Given
these uncertainties, no representations are made as to the accuracy
or fairness of such forward-looking statements, forecasts and
estimates. Furthermore, forward-looking statements, forecasts and
estimates only speak as of the date of this press release. Readers
are cautioned not to place undue reliance on any of these
forward-looking statements. ERYTECH disclaims any obligation to
update any such forward-looking statement, forecast or estimates to
reflect any change in ERYTECH’s expectations with regard thereto,
or any change in events, conditions or circumstances on which any
such statement, forecast or estimate is based, except to the extent
required by law.
- 230509 ERYTECH_PR_1Q23_VF
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