Pernix Therapeutics Holdings (PTX) Stock: Refinancing Leads To Blues

Pernix Therapeutics Holdings Inc (NASDAQ: PTX) is off to a relatively rough day in the market this morning, and for good reason. The company announced refinancing transactions that are designed to improve the overall financial picture. Of course, this led to fear among investors, causing losses and prompting our partners at Trade Ideas to alert us to the movement. At the moment (9:43), PTX is trading at $3.81 per share after a loss of $0.68 per share or 15.14% thus far today.

PTX Gains On Refinancing Transactions

As mentioned above, Pernix Therapeutics Holdings is having a rough day in the market today after releasing a press release that announced a series of refinancing transactions. These transactions are designed to improve liquidity and extend debt maturities. The details of these transactions are as follows…

  • PTX brings on a new $40 million asset-based revolving credit facility. This will refinance the Wells Fargo credit facility that was due for maturity on July 31st.
  • The company has also announced a $45 million delayed draw term loan. This particular loan includes immediate access to $30 million as well as an additional $15 million available for specific acquisition purposes.
  • There’s also an exchange of approximately $52 million in 4.25% convertible senior notes owned by institutional investors for about $36 million of new exchangeable notes and approximately 1.1 million shares of stock.

According to the PR, the transactions are all expected to close today, July 21st. Of course, they are subject to customary closing conditions.

Amended Settlement Agreement With GSK

On top of the news above, PTX also announced that it has improved its liquidity position by amending an agreement with GSK under which PTX will pay approximately $6.65 million to GSK, a massive reduction from the initial settlement of $14.5 million. In a statement, John Sedor, CEO and Chairman at Pernix Therapeutics, had the following to offer…

Pernix has achieved significant progress in improving our business over the last 12 months… These transformative agreements remove the financing overhang from our company, provide us with capital through at least the end of 2019 and allow us to focus on further growing the business. In addition, we now have access to capital to opportunistically pursue additional product acquisitions in order to enhance Pernix’s position as a leading pain and neurology focused specialty pharmaceutical company. We are grateful to the institutional investors involved in this transaction for the confidence they have shown in our growth strategy and the Pernix team through this agreement.

The agreement reached with GSK helps to further deleverage the Company and provides us with additional financial flexibility moving forward… We are now solely focused on furthering progress achieved over the last year.”

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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 PTX. In particular, we’re interested in watching the moves the company makes, especially on the product acquisition side, following today’s announcement. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!

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