Here we are for the announced capital increase
Here we are for the announced capital increaseFINANCING ISSUE
After Crossject had announced the “preparation of the launch” of a c. €5m capital increase aimed at securing the needs of the group until the Emergency Use Authorization is reached (€5.8m if the extension clause is exercised), the group confirmed it will proceed with it. While it was doomed to happen, the real news that the market is expecting is of course the filing of Zepizure, still planned…for this month.
FACT
The group will issue new shares for an initial total amount of around €5m, with shareholders maintaining their preferential subscription rights, which may be increased to around €5.7m if the extension clause is exercised.
ANALYSIS
The issue price for the new shares set at €1.40 (a 22.6% discount to the closing price of the Crossject share on 3 June), with the subscription period running from 12 to 20 June.
As already communicated in May, approximately 60% will be allocated to the final development phases of ZEPIZURE and to the initiation of production steps, including the related build-up of inventories, ahead of any reimbursement by the U.S. partner while the remaining c. 40% will be used to finance R&D for its other projects, ZENEO Adrenaline and ZENEO Hydrocortisone.
With the net proceeds of the issue, the Company estimates that its net working capital would be sufficient to meet its obligations until the end of 2025, assuming the first payments from its American partner following the first deliveries.
As we mentioned earlier, this capital increase was bound to happen given the cash-burn of the group before Zepizure is launched (and cashed-in). The dilution, considering the c. 46m current number of shares, will be around 8% (9% with the extension clause) which we deem reasonable. That said, the key topic is and remains the filing of Zepizure expected “any time soon”.
IMPACT
We will integrate the impact of the dilution and the benefit of the cash inflow in the group’s balance sheet.
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.
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