Eton Pharmaceuticals Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Financial Statements and Exhibits

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

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On October 2, 2024, Eton Pharmaceuticals, Inc. (the “Company”) entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Ipsen Biopharmaceuticals, Inc. (the “Seller”), a subsidiary of Ipsen S.A., pursuant to which the Company has agreed to acquire Increlex® (mecasermin injection) from Seller. Increlex is a biologic product used to treat children who suffer from severe primary insulin-like growth factor 1 deficiency (SPIGFD) because their bodies do not make enough insulin-like growth factor 1 (IGF-1). The product is approved in 40 territories, including the United States and the European Union.

 

Under the terms of the Purchase Agreement, the Company will purchase Increlex for $22.5 million at closing and will pay an additional $7.5 million for product inventory. The Company will also make payments to Seller of $2.5 million on each of the first and second anniversaries of closing. In addition, the Company will be obligated to purchase additional inventory over 30 months, in an amount not to exceed €15.0 million.

 

The acquisition is structured as an all-cash purchase without any financing contingencies and is expected to close near year-end 2024, subject to customary closing conditions. Each of the Company and Seller have made customary representations, warranties, covenants and indemnities in the Purchase Agreement. As part of the acquisition, the parties have entered into a transition services agreement, whereby Seller will continue to distribute the product in markets outside the United States for a period of six months following the closing. The Company will immediately commercialize the product within the United States upon closing.

 

The Company also entered into an amendment to its existing credit agreement with SWK Holdings that is contingent upon the closing of the Purchase Agreement. Under the terms of the amendment, the Company will expand its existing credit facility by $25.7 million to $30.0 million, extend the facility’s maturity to 3 years from closing, and reduce the facility’s annual interest rate to Secured Overnight Financing Rate (SOFR) plus 6.75%. In connection with and contingent upon the closing of the Purchase Agreement, the Company agreed to issue a warrant to the lender for the purchase of up to 289,736 shares of common stock at a price of $5.32 per share.

 

A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

 

 

 

 

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.