Thanks to the lower price for a new convertible bond at the end of 2018, Berliner Mologen AG can place its convertible bond in full and collect EUR 2.7 million.
Once again there is a lot at stake for the Berlin drug developer. After the three-month-long negotiations with the US company Oncologie Inc. about the expansion of a regional to a global license deal were declared to have failed last November, all eyes are on the data from the IMPALA phase III study, which are expected to be available in summer 2019. If the main drug candidate lefitolimod is convincing in the study, Mologen’s hope of having “new strategic opportunities for the monetization of lefitolimod” should be justified.
The current financing measure makes it clear that not everyone shares this hope. At the end of 2018, the conversion price was reduced from the initially planned EUR 2.47 to EUR 2.08 in order to create an additional subscription incentive. This calculation worked: Existing shareholders secured almost 40% as part of a public subscription offer. The remaining partially convertible bonds were allocated in oversubscription. The bonds are to be issued at the end of January with a term of eight years and an annual interest rate of 6%. Chief Financial Officer Walter Miller was pleased with the high level of subscriptions “because it shows the confidence of the shareholders in Mologen”. Mologen intends to use the issue proceeds primarily to finance the ongoing IMPALA study in the indication of metastatic colorectal cancer. Since Mologen has monthly costs of 1.2 million euros, another financing measure is likely to be forthcoming soon. The available money currently only lasts until the third quarter of 2019.
Miller recently admitted to the news platform 4investors.de that things didn’t go quite the way Mologen wanted: “We’ve never had such a good story. We expect the results of our pivotal phase III study as early as 2019.”
Past convertible bonds are the reason for calling an extraordinary general meeting, which will take place on February 26 in Berlin. Significantly pushed by the shareholder Deutsche Balaton AG, the chairman of the supervisory board, Oliver Krautscheid, is to be voted out. CFO Miller has also been criticized. However, he has already announced that he will not extend his contract, which expires at the end of March 2019. In addition, a special audit is to be carried out on the convertible bonds. Deutsche Balaton criticizes that the main creditor from the convertible bonds “can obtain a significant number of shares in the company cheaply for six years and can only decide to subscribe to shares at a point in time when the success of Mologen AG is already certain”.