KemPharm Receives FDA Clearance to Initiate KP879 Clinical Program for the Treatment of Stimulant Use Disorder
Financial Restructuring and Nasdaq Re-Listing Process Completed
KP879 is being developed as an extended-duration, agonist replacement therapy for the treatment of Stimulant Use Disorder (SUD), a condition for which there are no FDA-approved medications. KP879 utilizes serdexmethylphenidate (SDX), KemPharm’s prodrug of d-methylphenidate. SDX is also the primary active pharmaceutical ingredient (API) of KP415 and KP484, the Company’s product candidates which are intended for the treatment of attention-deficit/hyperactivity disorder (ADHD). It is anticipated that certain data from previously completed research may be leveraged for KP879, which
“We are pleased that the FDA has accepted the KP879 IND, enabling us to initiate the clinical program for KP879 currently planned to begin mid-year 2021,” said
Per the definitive collaboration and license agreement with an affiliate of
Multi-Phase Financial Restructure Process Completed
Over the last several weeks,
December 20, 2020, the Company entered into the December 2020Exchange Agreement with the Deerfield Lenders, which provided that upon completion of an equity offering of at least $40 million, the Deerfield Lenders would exchange additional debt into equity. In addition, the maturity date for the remainder of the debt would be extended to March 31, 2023. Subsequently, on December 28, 2020, the Company reported that its other lenders, Delaware Street Capitaland Kingdon Capital(together with Deerfield, the Lenders) had joined the December 2020Exchange Agreement.
December 23, 2020, a reverse stock split of 1-for-16 shares was made effective as a preparatory step to potentially qualify for re-listing on The Nasdaq Capital Market.
January 8, 2021, the Company announced pricing of a follow-on equity offering of $50 million, at a price of $6.50per share, with an issuance of a combination of common shares and pre-funded warrants to purchase 7,692,307 common shares, as well as the issuance of warrants to purchase an additional 7,692,307 at an exercise price of $6.50per share (the Offering Warrants). This transaction closed on January 12, 2021, with net proceeds to the Company of approximately $46.4 millionafter underwriting discounts and commissions.
January 8, 2021, shares of the Company’s common stock were re-listed and began trading on The Nasdaq Capital Market.
January 12, 2021, pursuant to the December 2020Exchange Agreement, the Company made a cash debt repayment of $30.3 millionto the Lenders and completed the exchange of approximately $31.5 millionof debt into preferred shares, leaving a remainder debt amount of approximately $7.6 millionwith a maturity date of March 31, 2023.
January 26, 2021, the Company announced a warrant exchange and inducement transaction with certain of holders of the Offering Warrants, whereby such holders agreed to exercise for cash the Offering Warrants to purchase 6,620,358 shares of the Company’s common stock in exchange for the Company’s agreement to issue new warrants (the Inducement Warrants) to purchase up to 7,944,430 shares of the Company’s common stock, which is equal to 120% of the number of shares of the Company’s common stock issued upon exercise of the Offering Warrants. As a result of this transaction, the Company will receive gross proceeds of approximately $44.0 million.
- We intend to use approximately
$8.0 millionof the proceeds from the warrant exchange and the inducement transaction to repay the remaining debt, including the related prepayment premium.
“The successful completion of this series of transactions, culminating in aggregate gross proceeds of approximately
About Stimulant Use Disorder (SUD):
Stimulant Use Disorders include those marked by abuse/misuse of cocaine, methamphetamines, prescription stimulant products that contain methylphenidate or amphetamine, and numerous designer stimulants including, for example, 3,4-methylenedioxypyrovalerone (MDPV) and 4-methylmethcathinone (mephedrone) (“bath salts”). According to the
Caution Concerning Forward Looking Statements:
This press release may contain forward-looking statements made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts, including without limitation KemPharm’s proposed development and commercial timelines, and can be identified by the use of words such as “may,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “potential,” “should,” “continue” or the negative versions of those words or other comparable words. Forward-looking statements are not guarantees of future actions or performance. These forward-looking statements, including the timing of potential initiation of the clinical program for KP879, the ability to use data from previously completed research for KP879 and the potential to streamline the development timeline of KP879, the potential clinical benefits of KP879, or any of KemPharm’s other product candidates, the expected PDUFA date for KP415, the potential of SDX as a platform technology, the potential cash runway for KemPharm’s operating forecast and the potential repayment of its remaining outstanding debt. These forward-looking statements are based on information currently available to
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