More Gloss, From A Form 8-K Last Week…

My apologies — other (billable) duties prevented me from getting this up sooner.

On September 15, the company added this news — by way of an SEC filed Form 8-K (only the first sentence is new):

“…On September 12, 2017, Humanigen received a letter from the U.S. Food and Drug Administration granting Fast Track designation to the Humanigen benznidazole development program.

On August 29, 2017, as previously disclosed, FDA announced that it had granted accelerated approval of a benznidazole therapy manufactured by another company for the treatment of Chagas disease, and had awarded the other manufacturer a tropical disease priority review voucher (PRV).
 
As a result of FDA’s actions and with the information currently available, Humanigen, Inc. no longer expects to be eligible to receive a PRV with its own benznidazole candidate for the treatment of Chagas disease. Accordingly, Humanigen is assessing its options in respect of that development program and the company’s monoclonal antibodies, lenzilumab and ifabotuzumab….”
All of the above means that Humanigen is highly likely to be approved as a benznidazole supplier, in the US — and reasonably soon. The question is whether that will be worth anything, since it will be second to market.

 

 

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The SEC Form D Related To The Aperture Ventures “Putable” Private Placement Has Filed…

In addition, Nomis Bay sold a small bit (39,000 shares) of their 3.86 million shares held, at around $0.46 per share, last week. [All of this with a sincere hat tip, to regular commenter Tim — who alerted us to the Form D filing, below….]

Neither is very momentous in truth (at least not compared to the overall events of last week). Here is that initial SEC Form D, for the record.

I should note that it is now unlikely that the full $15 million will be raised from Aperture, at least if these NASDAQ prices prevail — and there is little reason to believe they will not.

But onward, just the same. Time to see what sort of a license/sale or other exit deal this team can engineer.

Namaste, [and a friendly hello — after five long years. . . . smile.]

The Denouement — Courtesy Of PathoPhila, Here…

Without additional ado — I do endorse all that she says (though I might still hold out some smallish hope that CDC and other government players might want two supply sources — at a fairly modest price).

Other than that, we would agree to a tee, here:

“…Humanigen is trading at 35 cents this morning. I see only a yard sale in its future: lenzilumab, ifabotuzumab, and office furniture. I predict the office furniture goes first.

And I also agree: There’s no viable revenue-generating market in the US for benznidazole, unless the company is willing to charge extortionist prices once their version of the drug is approved. But that’s not possible, if (IF!) the current US marketer for benznidazole prices the drug “at cost, plus …a reasonable margin.”

Yeah, Shkreli made out relatively well on his Kalobios investment. But that $5 million or so he made is already spoken for.

And hey…remember the PIPE investors, most of whom were Shkreli cronies and/or Turing employees? They’re pretty much SOL…”

I would also only observe that the PIPE investors, and all pre-bankruptcy KaloBios holders except Shkreli, did get some recovery in the Spring of 2016.

Even so, it is particularly galling that the company had to buy Mr. Shkreli out, as it exited bankruptcy — ostensibly to remove the stain of his name… and yet, here over a year later: WHAM! His odious reputation crushes the company’s valuation anew.

Ugly. I can’t wait to see him wearing… orange.

[U] While I Was Off-Grid Yesterday… YIKES!

Update: the likely PRV winner will be a Spanish company called Chemo Research S.L. — it apparently has nine or fewer full time employees, and from the looks of it, no other substantial operations. Now it is worth perhaps $300 million in cash value, for the PRV exchange rights. I’d love to know who owns this Madrid based, less than $2 million euro per year in revenue company… and, do they have any connection to Agent Orange?

And imagine being the new CFO — (perhaps his surname was… aptly prescient). Note that his start date isn’t until the end of next week — and the now company is in full on re-tool mode. Ouch.

[End, update.]

Damn. No PRV for Humanigen on Chagas. That’s a MAJOR blow to valuation. Stock is off nearly 50 per cent on the morning.

Breaking: “…On August 29, 2017, the U.S. Food and Drug Administration announced that it had granted accelerated approval of a benznidazole therapy manufactured by another company for the treatment of Chagas disease, and had awarded the other manufacturer a tropical disease priority review voucher (PRV).

As a result of FDA’s actions and with the information currently available, Humanigen, Inc. no longer expects to be eligible to receive a PRV with its own benznidazole candidate for the treatment of Chagas disease. Accordingly, Humanigen is assessing its options in respect of that development program and the company’s monoclonal antibodies, lenzilumab and ifabotuzumab….”

 

More soon — but this is pretty bad for Savant as well. Good call, Billy!

[U] Humanigen Snags Barr Labs Alum As New CFO… Greg Jester (Most Recently Of Tris Pharma)

UPDATED 8 PM EDT: The just filed SEC Form 8-K indicates he will be paid $290,000, plus a 50 per cent cash bonus opportunity, and 150,000 initial share option grant:

In connection with his appointment as CFO, the Company and Mr. Jester entered into an offer letter (the “Offer Letter”) pursuant to which Mr. Jester will be eligible to receive the following compensation: (i) an initial annual base salary of $290,000; (ii) an annual bonus pursuant to the Company’s annual bonus plan for executive officers, as then in effect, with a maximum bonus (if any) equal to 50% of Mr. Jester’s salary for the bonus period; and (iii) certain medical, retirement and other benefits generally available to the Company’s other employees. Under the Offer Letter, Mr. Jester will also be eligible to receive stock options to purchase 150,000 shares of the Company’s common stock pursuant to the terms and conditions set forth in a stock option agreement governed by the Company’s 2012 Equity Incentive Plan….

[End updated portion.]

Ahem. The newly-vacant seat has been filled, per this press release:

“… Humanigen, a biopharmaceutical company focused on advancing medicines for patients with neglected and rare diseases, today announced it has appointed Greg Jester as its chief financial officer (CFO), effective September 5, 2017.

Mr. Jester brings more than two decades of financial, operational management and entrepreneurial experience in the life sciences industry. He will be responsible for further strengthening Humanigen’s financial foundation to facilitate the company’s next growth phase.

‘We are delighted to welcome Greg to Humanigen. His energy and record of delivering results and building scalable financial organizations are a great fit as we continue our work with our product candidates,’ said Cameron Durrant, MD, chairman and CEO. ‘I am confident Greg will bolster the Humanigen team’s ability to execute, to deliver on milestones and to create value for our stakeholders by advancing important medicines to patients with neglected and rare diseases.’

Most recently, Mr. Jester served as vice president, finance, for Tris Pharma. In addition to previously serving as interim controller for a $40 million private equity-owned generic pharmaceutical company and financial consultant for a commercial drug device company, Mr. Jester has held CFO roles at private and publicly-owned pharmaceutical companies, including Alvogen and Innovive Pharmaceuticals, and senior finance roles at Barr Pharmaceuticals, which was eventually acquired by Teva Pharmaceuticals. Mr. Jester holds a Bachelor of Science in business administration from the University of Richmond….”

Now you know. Onward — good to have the seat filled. [Updated 09.08.2018 — corrected photo in graphic. My apologies.]

[U] The Definitive Aperture Stock Purchase Agreement Has Been SEC Filed Tonight…

[Saturday dawn updates, throughout — to include my thoughts/analysis, after a solid night of sleep. Smile.] Here is a direct link to it, but commenter “Tim” was right — the obligation to buy stock is limited by how much volume trades in the stock, and at what prices.

So it could end up being less than $15 million in gross proceeds to the company, but not more.

And in truth, it could be pretty highly dilutive. Here’s a bit of the summary in the 8-K, but do read the full purchase agreement, for the finer points of how it all works — under the obviously highly negotiated mechanical put pricing formulae:

“…[Humanigen (the “Company”) may] require Aperture to purchase up to $15.0 million worth of newly issued shares (the “Put Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), over the 36-month term following the effectiveness of the initial resale registration statement described below (the “Investment Period”). From time to time over the Investment Period, and in the Company’s sole discretion, the Company may present Aperture with one or more notices requiring Aperture to purchase a specified dollar amount of Put Shares, based on the price per share per day over five consecutive trading days (a “Pricing Period”). The per share purchase price for these shares equals the daily volume weighted average price of the Common Stock on each date during the Pricing Period on which shares are purchased, less a discount of 6.0% based on a minimum price as set forth in the Purchase Agreement. In addition, in the Company’s sole discretion, but subject to certain limitations, the Company may require Aperture to purchase a percentage of the daily trading volume of Common Stock for each trading day during the Pricing Period. In addition, Aperture will not be obligated to purchase under the Purchase Agreement any shares of Common Stock which, when aggregated with all other shares of Common Stock then beneficially owned by Aperture and its affiliates, would result in Aperture’s beneficial ownership of more than 9.99% of the Company’s issued and outstanding shares of Common Stock….”

So if the prevailing NASDAQ per share price declines so much that the $15 million in total would cause Aperture to buy above the threshold for reporting on SEC Forms 3 and 4… Aperture will be excused from completing those purchases. This would be true, even if it is the dilution caused by the stock “put rights” themselves, that occasioned the stock price declines. Said another way, perhaps Aperture doesn’t want to be more than a 10 per cent holder — or perhaps Black Horse wants to limit Aperture’s take — of the potential PRV proceeds, to no more than 10 per cent. Condor’s observation? It is unclear which version is more likely.

Fascinating. That’s simply… fascinating. And so, Aperture could become a Schedule 13D filer (at above five per cent holdings), but it will stop just short of being a 10 per cent holder. Unless it decides in writing to accept 13D status, I gather.

Now we wait for a resale registration statement to be filed. The pricing mechanics alone are rather intricate — I’ve never seen such a thing, in 34 years. I’ve seen lots of pre-negotiated discount callable subscriptions, but never one that set a hard dilution limit, in favor of all prior common stockholders at a public company. Usually, if a third party agrees to buy in (i.e., someone in Aperture’s shoes), in a situation as fraught with risk as this — the committed buyer pretty much controls all outcomes. This speaks to the power that Black Horse Capital, et al., still wields at the table, one year post the reorganization in bankruptcy. As I say, fascinating.

Onward — even as monstrous Harvey loses strength as it moves slowly inland, and away from the New Orleans crescent seaboard by the luminous Saturday dawn light. . . do stay safe, one and all.

Courtesy Our Commenters: Humanigen Secures Up To $15 Million In Committed Future Equity Infusions From Aperture…

This morning’s newly-added flexibility dovetails nicely with the recent debt financing news, to provide liquidity. However, were I running Humanigen, I’d draw equity solely as a last resort — given the relatively high-dilution factor (as a result of low prevailing prices) for the stock, as traded OTC on the NASDAQ of late.

Next step will be filing a resale registration statement at the SEC’s EDGAR window, to be able to draw on the below — once cleared by the good folks at 450 Fifth Street, NW… From the presser then, and to be clear — this is decidedly good news, in any event:

“…Humanigen… a biopharmaceutical company focused on advancing medicines for patients with neglected and rare diseases, today announced it has signed an agreement for a committed equity financing facility under which it may from time to time, at the company’s sole discretion, sell up to $15 million of its common stock to Aperture Healthcare Ventures Ltd. The actual amount of funds that can be raised under the Aperture facility will depend on the number of shares sold under the agreement and the market value of Humanigen’s stock during the pricing period of each sale. 

The company may begin utilizing the Aperture facility following the satisfaction of certain conditions, including, among other things, that a registration statement covering the resale of the shares of common stock subject to the Aperture facility is declared effective by the U.S. Securities and Exchange Commission….” 

Aperture leadership is a solid group of seasoned life science investors. This is a fine vote of confidence, given that it appears Aperture doesn’t have any downside protection, on price. Maybe that will appear in the soon-to-be-filed SEC Form 8-K.

We shall see. Onward! [And thanks again to Mike Nil, for the sublime 2017 Shawnee National Forest eclipse shot!]