Emisphere Technologies Ltd. reached agreement with MHR Fund Management LLC to restructure the pharmaceutical and drug delivery company's current loan facility, certain promissory note obligations and other royalty and licensing agreements.
MHR revised the terms of its existing loan facility by offering a permanent $7 million reduction to the outstanding principal owed by Emisphere, which will be effective upon the first commercial sale of a product under the existing GLP-1 development and license agreement for semaglutide, a treatment for type 2 diabetes.
MHR also suspended a cash proceeds sweep stipulated in both the loan facility and promissory notes until October 2018 unless the proceeds subject to the sweep exceed $5 million. In addition, MHR waived its rights to the cash proceeds sweep worth about $7 million from funds received by the pharmaceutical company from its licensing agreement with Novo Nordisk Pharmaceutical. Under the agreement, Novo Nordisk will pay royalties to Emisphere and a new payment term has been reached under which Novo Nordisk will pay a portion of these royalties directly to MHR.
Emisphere is also released from its 2015 fiscal year obligations for royalty payments to MHR for the net sales of Eligen B12. Any future payment arising from the default of payments regarding Eligen B12 sales milestones by the drug delivery company is also waived.
These actions set forth a "solid runway to realize the promise of additional future growth initiatives," Emisphere CEO Alan Rubino said in a news release.