aibioUroGen Pharma issues 374,843 shares to IconOVir in ICVB-1042 asset purchase
Tickers URGN
UroGen paid for IconOVir Bio's ICVB-1042 candidate with shares tied to a $4.0 million price, a possible $15.0 million sales milestone and a low single-digit royalty. Entities tied to UroGen's board chair hold IconOVir notes.
Key facts
- Company
- UroGen Pharma Ltd. (NASDAQ: URGN)
- News type
- Financings
- Primary source
- UroGen Pharma Ltd. Form 8-K filed February 20, 2025 (SEC EDGAR)
UroGen Pharma Ltd. (Nasdaq: URGN) issued 374,843 ordinary shares to IconOVir Bio, Inc. as part of the payment for a drug candidate and related assets. The asset purchase closed on February 14, 2025, and the company reported it in a Form 8-K filed February 20, 2025, under Item 1.01 for the agreement and Item 3.02 for the unregistered share sale.
What UroGen bought
UroGen Pharma Ltd. and its subsidiary UroGen Pharma, Inc., called the Purchaser in the filing, signed an Asset Purchase Agreement with IconOVir. The Purchaser acquired certain IconOVir assets, including the product candidate ICVB-1042, along with contracts, intellectual property, regulatory submissions and registrations, and data related to the candidate. The Purchaser also assumed certain liabilities under the acquired contracts, which the filing describes as immaterial.
The purchase price
The filing divides the price into parts. The first is the share issue. On the closing date UroGen issued 374,843 ordinary shares, a count that reflects a purchase price of $4.0 million divided by the volume-weighted average closing price of the shares on Nasdaq over the 30 consecutive trading days ending the day before closing. The shares are payment for assets, not a cash sale of stock.
The second is a one-time $15.0 million cash payment, due if a cumulative worldwide net sales milestone is reached for products containing or comprising ICVB-1042. The third is a low, single-digit percentage royalty on annual worldwide net sales of those products during the royalty term, subject to certain reductions. The company also assumes the immaterial liabilities.
Development commitment and registration rights
From the closing date until the earlier of the tenth anniversary and the first commercial sale of any ICVB product in any jurisdiction, UroGen agreed to use commercially reasonable efforts to develop and commercialize one ICVB product. The company granted IconOVir piggyback registration rights for the new shares. Those rights let the holder ask to include its shares when the company registers other securities, subject to customary exceptions and cutback rights.
Who is advising
The 8-K names no placement agent, underwriter, financial adviser or counsel for the transaction. It describes the share issue as made in reliance on Section 4(a)(2) of the Securities Act and Regulation D, with IconOVir representing that it is an accredited investor acquiring the shares for its own account for investment.
Board chair's interest
Entities affiliated with Arie Belldegrun, M.D., the chair of UroGen's board, hold certain promissory notes of IconOVir. The 8-K says those notes may entitle the entities to receive, in aggregate, about 28.3% of the purchase price paid to IconOVir under the agreement. That related interest sits alongside a deal the company describes as a purchase of assets, not a financing.
Company background
Chief Financial Officer Chris Degnan signed the 8-K. UroGen's annual report filed March 14, 2024 describes a company developing treatments for urothelial and specialty cancers using RTGel, its reverse-thermal hydrogel platform. Jelmyto is the company's marketed product, and UGN-102 is an investigational candidate in its pipeline. That report is nearly a year old at the time of this 8-K. It reported cash and cash equivalents and marketable securities of $141.5 million at December 31, 2023, and it said the company's losses and negative operating cash flows since inception raise substantial doubt about its ability to continue as a going concern.
What comes next
The next dated item is the development commitment, which runs to the tenth anniversary of the closing or the first commercial sale of an ICVB product, whichever is earlier. The $15.0 million payment and the royalty depend on sales that the filing does not project, and the share count will be fixed at the closing average price, not at a later date.