A convertible bond and options for existing shareholders
A convertible bond and options for existing shareholdersFINANCING ISSUE
FACT
Crossject announced the granting of free options (“BSAâ€) to existing shareholders as well as the issue of a convertible bond (€5.25m). Existing shareholders will be granted one option for ten shares held, each option enabling them to purchase a share for €4.50 as of 10 April 2018 and until 30 June 2018. The convertible bond (maturity 20 February 2020) does not bear interest and SNPE and Gemme Ventures, the company’s historic shareholders, will contribute €1.5m to the total subscription. The subscription price will be 92% of the nominal value and the conversion price will be the lowest between €4.50 and a weighted average share price less 10% prior to the conversion.
ANALYSIS
The company intends to use the proceeds of the convertible bond issuance to finance its development plan, in particular regarding the work needed prior to regulatory filings for its NTEs. The options could provide the group with another €3.9m in financing, should all shareholders exercise their rights (excluding treasury shares). Of course, this would come with a dilution, with the creation of a total maximum number of new shares of 2.1m shares (1,128k from the convertible and 877k from the options), leading to a new total number of shares of 11.1m vs 8,958k or +23%. At the same time, the cash position would increase by €9.2m (again if all options are exercised), enabling the group to finance the development phases before regulatory market approvals. Even if these operations secure the short/mid-term financing of the company, they do imply a rather significant dilution. The price to pay for the company’s products to reach the market…
IMPACT
We will update our numbers when the outcome of these operations is known and probably together with the FY17 results. We expect a rather neutral short-term market reaction though, the extra financing compensating for the dilution.
Crossject SA is a France-based company that designs and develops medical injection systems. The Company specializes in needle-free, pre-filled, single-use injection systems for intradermal, subcutaneous and intramuscular applications for pharmaceutical companies. Is also has a pipeline and three drugs in the preclinical or clinical phase of research. The Company's products, which are based on well-known injectable drugs (chemicals and biologics), are designed to enhance patients' safety, compliance and comfort. Crossject's first ZENEO SUPERGENERIC product is expected to reach the market in the year 2015. The Company has industrial partnerships with Hirtenberger and Recipharm.
AlphaValue Corporate Services capitalise on the research and credit analysis expertise deployed by AlphaValue with major institutional investors at European level over the past nine years. The proprietary tools and processes enabling AlphaValue Corporate Services to establish a valuation and/or a credit risk assessment are identical to those used by AlphaValue to the benefit of its institutional clients. The only difference is the recognition that a company evaluation cannot be dissociated from the fact that the latter is paying for the service (AlphaValue Corporate Services), as opposed to the investor footing the bill (AlphaValue). AlphaValue’s research tools are characterised by the transparency of the valuation methodologies, their responsiveness to market data and by nine years’ experience of a universe numbering more than 450 European companies. Through its coverage and sector exhaustiveness, AlphaValue ranks alongside the major research houses in Europe and constitutes the only new entrant to the European space in the past decade. This significant presence is reflected in an unrivalled distribution capability via platforms commonly adopted by investors to access research: Factset, Bloomberg, Capital IQ and the numerous websites. AlphaValue is one the largest research contributors to these platforms, to the benefit of AlphaValue Corporate Services issuer clients. The AlphaValue Corporate Services analysts are AlphaValue’s sector specialists. Their robust knowledge of the business models in their sectors enables the rapid generation of incisive, relevant research and advantageous interaction with the management teams.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.