(News Bulletin 247) – The group specializing in the treatment of diabetes and obesity has given the pharmaceutical group this exclusive right to its compound “M1Pram”, in exchange for a payment of 10 million euros. It has also obtained financing commitments from investors of 10 million euros.

Adocia will be able to breathe. The Lyon-based biopharmaceutical company specializing in the treatment of diabetes and obesity was experiencing a tight cash situation and was actively working to seek funding. And since June 1, the action was suspended before resuming this Thursday.

The company explained why this suspension was decided and lasted for so long. Since the end of March, it no longer respected its covenants, that is to say its financial commitments, to its main lender, namely IPF Partners. It was trying to arrange these covenants and/or restructure its debt. But on June 1, IPF Partners gave the group formal notice to reimburse the sum of 9.8 million euros.

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The company was in discussions with the pharmaceutical group Sanofi on the granting of an exclusive trading right and was trying to organize a fundraiser to meet the demands of its creditor.

“A memorandum of understanding has finally been signed between IPF Partners and Adocia in order to suspend the payment of the debt until June 30, 2023”, explained the company.

Around 20 million euros paid by the end of June

In fact, Adocia announced on Thursday that it had granted Sanofi exclusive trading rights for M1Pram, a compound combining insulin with pramlintide to fight diabetes and overweight. This agreement gives the pharmaceutical group a right of first glance to establish a global partnership on the product, currently in phase 2 of clinical trials (an intermediate stage before phase 3, the last before potential marketing). In exchange, Adocia will receive “in the coming days”, according to the press release, an amount of 10 million euros.

In addition, Adocia has obtained the commitment of investors, including the public bank Bpifrance and Gérard Soula, the company’s founder, with a view to carrying out a capital increase of 5 million euros, as well as the company d investment by Vester Finance to issue convertible bonds at the same time for an additional amount of 5 million euros, paid in a single tranche.

It is therefore 20 million euros which will strengthen Adocia’s cash flow by the end of July, which will obviously also reimburse the 9.8 million euros it owes to IPF Partners.

Separately, the company says it will “prioritize” its product portfolio “in order to extend its cash horizon through the end of the second quarter of 2024.” It should therefore direct its resources towards the most important potential treatments in its pipeline (M1Pram or the cell therapy AdoShell Islets).

Price bounce

Finally, Adocia expects payments next year under certain conditions from its Chinese partner Tonghua Dongbao Pharmaceutical, listed on the Shanghai Stock Exchange, and which has a license agreement for Adocia’s insulin in China.

These payments would be triggered by the completion of the first ongoing phase 3 study on BioChaperone Lispro (an ultra-rapid insulin), for $10 million, and the start of the phase 3 clinical program on BioChaperone Combo (a combination of long-acting and rapid-acting insulins) for $10 million as well. These amounts would allow the company to have sufficient cash to carry out its activity until the end of 2024.

On the Paris Stock Exchange, the Adocia share jumped 23.7% to 4.90 euros around 4 p.m. in a market that was nevertheless in the hard, the SBF 120 losing 2.4%.

To return to the agreement with Sanofi, it should be noted that the pharmaceutical giant has already begun to resort to external growth for the development of products in diabetes. In March, the CAC 40 tenant announced the acquisition for nearly $3 billion of Provention Bio, an American company that designs a drug candidate aimed at delaying the onset of type 1 diabetes.