Novelion Therapeutics Inc (NASDAQ: NVLN) is flying early on in the trading session this morning, and for good reason. The company announced a business update and term loan agreement that is leading to quite a bit of excitement. Today, we’ll talk about:
- The corporate update and loan agreement;
- what we’re seeing from NVLN stock as a result; and
- what we’ll be watching for ahead.
NVLN Announces Business Update
As mentioned above, Novelion Therapeutics is having a great day in the market today after announcing a business update. In a press release issued early this morning, the company said that its subsidiary, Aegerion Pharmaceuticals, has entered a new secured financing facility. The facility was entered into with certain funds managed by Athyrium Capital Management and Highbridge Capital Management.
NVLN said that the facility includes $50 million in new secured first lien term loans that were funded in cash and $22.5 million of new secured term loans that were used to retire the company’s 2% convertible notes that are due in August of 2019.
The company also said that $21.2 million of the proceeds were used to pay indebtedness under a secured loan facility entered into in March in full as well as $3.5 million in a secured loan facility used to repay par tof the existing secured loan facility made by Novelion to Aegerion.
In a statement, Jeff Hackman, Interim CEO at NVLN, had the following to offer:
The operational improvement and cost reduction initiatives that we executed throughout 2018 have made an impact on the stability of our business, and position Aegerion to become cash flow positive by the second quarter of 2019. This financing, which was sized to provide adequate runway to bridge to cash generation at the Aegerion level, also sets us on a path to a more comprehensive capital restructuring – our primary near-term goal. We are encouraged by an ongoing productive dialogue with Aegerion’s convertible debtholders to help us meet this goal, and are pleased that some of our largest bondholders showed further support for the Company by providing us with this new capital. As always, we will strive to continue to serve our patients and ensure that our important therapies continue to be made available to those in need.
The company also said that it expects to achieve positive cash flow at Aegerion by the second quarter of 2019 with net product sales of between $145 and $160 million.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of Novelion Therapeutics, the news proved to be overwhelmingly positive. After all, the company is on a much stronger financial foundation than it was in the past. So, it comes as no surprise that excited investors are pushing the stock on a run for the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:33), NVLN is trading at $1.47 per share after a gain of $0.76 per share or 108.42% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on NVLN. In particular, we’re interested in following the story surrounding the company’s continued restructuring and push toward cash flow positive. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!