ALPHARETTA, GA – Alimera Sciences, Inc., a biopharmaceutical company that specializes in the research, development and commercialization of prescription ophthalmic pharmaceuticals, today announced that it has entered into a securities purchase agreement (Purchase Agreement) with a group of institutional investors, including both existing and new investors, for a $40 million Series A Convertible Preferred Stock (Series A Preferred) financing. Alimera intends to use the net proceeds of this offering to fund the development and commercialization of ILUVIEN(R) and for the other working capital purposes permitted under the Purchase Agreement.
Palo Alto Investors acted as the lead investor in the offering, with Sofinnova Ventures and New Enterprise Associates also participating.
“We are very excited to announce this financing to provide the necessary capital to launch ILUVIEN in Europe,” said Dan Myers, Alimera’s President and Chief Executive Officer. “Over the last several months we have performed extensive market research on the market opportunity for ILUVIEN in Europe and our findings have exceeded our initial internal expectations. During this research, physicians indicated that their greatest unmet need in treating DME is a therapy that can provide a sustained duration of effect and acknowledged that they need a therapy beyond laser and anti-VEGF for the sizeable population that has chronic macular edema. As a result, we intend to proceed with the direct commercialization of ILUVIEN in the United Kingdom, France and Germany, to the extent that ILUVIEN has received French and German approval, in 2013.”
The Purchase Agreement provides for the sale of 1,000,000 shares of the Company’s Series A Preferred and warrants to purchase an additional
300,000 shares of Series A Preferred. For each unit consisting of one share of Series A Preferred and a Warrant to purchase .30 of a Share of Series A Preferred, the Investors have agreed to pay $40.00, resulting in gross proceeds to the Company of approximately $40 million, before deducting expenses payable by the Company.
Each share of Series A Preferred is initially convertible into approximately 13.75 shares of the Company’s common stock, based on an initial conversion price of $2.91 per share. The conversion price is subject to standard broad-based weighted average anti-dilution adjustments, as well as other standard adjustments in the event of changes to the Company’s capital structure. The warrants are exercisable upon issuance at an exercise price of $44 per Series A Preferred share, provided, however, that the warrants may be exercised, at the option of the holders, directly for the common stock that would otherwise then be issuable upon conversion of the Series A Preferred covered by such warrants.
The Series A Preferred is entitled to receive dividends and other distributions pro rata with the common stock, is not redeemable and may not be converted at the option of the Company, but is subject to mandatory conversion upon the achievement of certain future milestones.
Upon the closing of the financing, Alimera’s Board of Directors will be expanded to 9 members and Dr. Garheng Kong, MD, PhD, managing member of Sofinnova Venture Partners, will be elected to fill the new Board seat. Prior to joining Sofinnova in 2010, Dr. Kong was a general partner at Intersouth Partners, where he led the first institutional investor round in Alimera.
“Alimera is entering into an important phase of commercialization, and I am very pleased to serve as a member of this Board of Directors,”
said Dr. Kong. “We believe that ILUVIEN’s efficacy and duration of activity, compared to current therapies, will offer patients suffering from chronic diabetic macular edema better outcomes with less discomfort and inconvenience. Alimera has an outstanding management team, and I look forward to again working closely with them in the coming months and years to drive the company and its products forward.”
The closing of the financing is subject to customary closing conditions, including the approval of the holders of a majority of the outstanding shares of common stock of the Company, as required under the applicable regulations of The NASDAQ Global Market, at a special meeting of the stockholders of the Company. Stockholders holding approximately 56% of the Company’s common stock, as of July 17, 2012, have entered into separate agreements with the Company whereby they have agreed to vote all of their shares in favor of the transaction.
The analyst day webcast will be archived on the Investor Relations section of the corporate website, at http://www.alimerasciences.com, through August 15, 2012.