Adamas Pharmaceuticals,Inc. (NASDAQ:ADMS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On May11, 2017, Adamas Pharmaceuticals,Inc., through a newly
formed wholly-owned subsidiary, Adamas Pharma, LLC (collectively
the Company), entered into a $100 million royalty-backed note
arrangement (the Arrangement) with HealthCare Royalty Partners
III, L.P. (HCR) to a Loan Agreement, a Contribution and Servicing
Agreement and promissory notes and other customary related
documents with respect to a secured loan transaction. The
Arrangement provides for an initial loan of $35 million at
closing and the potential to borrow an additional $65 million
upon U.S. Food and Drug Administration (FDA) approval and receipt
of Orphan Drug exclusivity of ADS-5102 (amantadine)
extended-release capsules for the treatment of levodopa-induced
dyskinesia in people with Parkinsons disease if achieved prior to
a specified date. The Company will pay quarterly fixed interest
at an annual rate of 11.0% on outstanding principal amounts, and
interest and principal will be payable from the proceeds of a
12.5% royalty on U.S. net sales of ADS-5102 and up to $15 million
of the Companys annual royalties from Allergan on U.S. net sales
of Namzaric starting in May2020. Beginning in January2021, the
$15 million in annual Company royalties from Allergan is payable
at the rate of $3.75 million per quarter. The HCR notes mature in
December2026, if not earlier prepaid. Adamas plans to use the
proceeds from the royalty-backed note agreement for general
corporate purposes, including to launch and commercialize
ADS-5102 for the treatment of levodopa-induced dyskinesia in
people with Parkinsons disease in the United States. A New Drug
Application (NDA) for ADS-5102 for the treatment of
levodopa-induced dyskinesia in people with Parkinsons disease is
under review by the FDA with a Prescription Drug User Fee Act
(PDUFA) date of August24, 2017.
Prior to the interest payment date following the ninth full
calendar quarter after the funding of the earlier of the $65
million additional loan and October31, 2018, the principal of the
loans will not be subject to amortization and to the extent such
royalties are insufficient to pay interest in full, any unpaid
portion of the quarterly interest payment will be added to the
principal amount of the loans. The royalty rate on net sales of
ADS-5102 will drop to 6.25% after the principal amount of the
note has been fully repaid, and may increase up to 22.5% of U.S.
net sales and other consideration received outside of the U.S. if
total interest and principal payments have not reached minimum
specified levels. Under the Arrangement, the Company may
terminate its payment obligations by prepayment of 200% of the
outstanding principal balance.
In connection with the Arrangement, the Company assigned the
intellectual property rights, existing agreements with respect to
the manufacture and distribution of ADS-5102 and the License
Agreement between the Company and Forest Laboratories Holdings
Limited dated as of November12, 2012 to Adamas Pharma, LLC and
pledged the ownership interests of the subsidiary to HCR as
security for the Arrangement. The Arrangement further provides
for assignment into Adamas Pharma, LLC of future intellectual
property, licenses, assets and agreements with respect to the
manufacture, development, supply, distribution, sale and
commercialization of ADS-5102. The Arrangement contains customary
events of default permitting HCR to accelerate and require
mandatory prepayment of outstanding principal and interest,
including: failure to timely pay principal and interest when due
and payable; failure to perform specified covenants with respect
to maintenance of the collateral and prohibitions on liens with
respect to the collateral; limitations on payments of dividends,
additional loans, acquisition or merger transactions not in
accordance with the Arrangement; and other limitations on actions
and activities that might have a material adverse effect on the
Arrangement.
The above description of the Arrangement is a summary of the
material terms of the Loan Agreement and the Contribution and
Servicing Agreement and related documents, does not purport to be
complete and is qualified in its entirety by reference to the
respective exhibits which will be filed as exhibits to the Adamas
Pharmaceuticals,Inc. Quarterly Report on Form10-Q for the quarter
ending June30, 2017.
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The information in Item1.01 above is incorporated by reference
into this Item2.03.
Item 8.01. Other Events
Entry into Sales Agreement
On May11, 2017, Adamas Pharmaceuticals,Inc. (the Company)
entered into a Sales Agreement (the Sales Agreement) with Cowen
and Company, LLC (Cowen) to which the Company may sell from
time to time, at its option, shares of the Companys common
stock having an aggregate offering price of up to $50 million,
through Cowen, as sales agent (the ATM Offering). to the Sales
Agreement, sales of the common stock, if any, will be made
under the Companys previously filed and currently effective
Registration Statement on FormS-3 (File No.333-214409), at
market prices by any method that is deemed to be an
at-the-market offering as defined in Rule415 under the
Securities Act, as amended (the Securities Act), including
sales made directly on the NASDAQ Global Market and any other
trading market for the common stock.
Subject to the terms and conditions of the Sales Agreement,
Cowen will use its commercially reasonable efforts consistent
with its normal trading and sales practices and applicable
state and federal laws, rulesand regulations and the rulesof
the NASDAQ Global Market to sell on the Companys behalf all of
the shares of common stock requested to be sold by the Company.
Cowen will offer the common stock subject to the terms and
conditions of the Sales Agreement on a daily basis or as
otherwise agreed upon by the Company and Cowen. The Company
will designate the maximum amount of common stock to be sold
through Cowen on a daily basis or otherwise determine such
maximum amount together with Cowen. The Company may instruct
Cowen not to sell common stock if the sales cannot be effected
at or above the price designated by the Company in any such
instruction. The Company or Cowen may suspend the offering of
common stock being made through Cowen under the Sales Agreement
upon proper notice to the other party.
The compensation payable to Cowen as sales agent shall be up to
3.0% of the gross sales price of the shares sold through it to
the Sales Agreement. In addition, the Company has agreed in the
Sales Agreement to provide indemnification and contribution to
Cowen against certain liabilities, including liabilities under
the Securities Act of 1933, as amended. The total expenses of
the offering payable by the Company, excluding commissions
payable to Cowen under the Sales Agreement, will be
approximately $280,000.
The Company is not obligated to make any sales of shares of
common stock under the Sales Agreement. The offering of common
stock to the Sales Agreement will terminateupon (a)the sale of
all of the shares of common stock subject to the Sales
Agreement or (b)the termination of the Sales Agreement in
accordance with its terms.
The Sales Agreement is attached to this Current Report on
Form8-K as Exhibit1.1 and is incorporated herein by reference.
The foregoing description of the material terms of the Sales
Agreement does not purport to be complete and is qualified in
its entirety by reference to the exhibit attached hereto.
The legal opinion of Cooley LLP relating to the shares of
common stock being offered to the Sales Agreement is filed as
Exhibit5.1 to this Current Report on Form8-K.
This Current Report on Form8-K shall not constitute an offer to
sell or the solicitation of an offer to buy the common stock
discussed herein, nor shall there be any offer, solicitation,
or sale of the common stock in any state in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
Item 9.01. Financial Statements and
Exhibits
|
ExhibitNo. |
|
Description |
|
1.1 |
Sales Agreement, dated May11, 2017, between Adamas |
|
|
5.1 |
Legal Opinion of Cooley LLP |
|
|
23.1 |
Consent of Cooley LLP (included in Exhibit5.1) |
About Adamas Pharmaceuticals, Inc. (NASDAQ:ADMS)
Adamas Pharmaceuticals, Inc. is a pharmaceutical company. The Company is engaged in developing medicines to manage the daily lives of those affected by chronic neurologic disorders. It offers a platform based on an understanding of time dependent biologic effects of disease activity and drug response to achieve relief without tolerability issues. It has developed a portfolio of chrono-synchronous therapies to address chronic neurologic disorders. Its first product candidate is ADS-5102, a chrono-synchronous amantadine therapy, for the treatment of levodopa-induced dyskinesia (LID) in patients with Parkinson’s disease (PD). It has completed Phase II proof-of-concept study of ADS-5102 in these patients. Its Phase III clinical program included three placebo-controlled trials: EASED, EASE LID and EASE LID 3. Its second product candidate is ADS-4101, an extended-release version of single-agent compound for the treatment of epilepsy (partial onset seizures). Adamas Pharmaceuticals, Inc. (NASDAQ:ADMS) Recent Trading Information
Adamas Pharmaceuticals, Inc. (NASDAQ:ADMS) closed its last trading session 00.00 at 17.09 with 195,215 shares trading hands.
