Business & Finance
Active Biotech updates financial position of the company
8 December 2017 -

Active Biotech (STO:ACTI), a biotechnology company with focus on neurodegenerative/inflammatory diseases and cancer, on Thursday provides updated information about the company's financial situation.

Reportedly, the company's partnership agreements with Teva Pharmaceutical Industries Ltd and NeoTX Therapeutics Ltd have a decisive impact on the company's future revenues and financial position. Also, the company's board of directors has decided to sell the company's property in Lund as a possible way of generating additional liquidity for the company.

As of 1 December 2017, the ARPEGGIO study, with laquinimod in primary progressive MS (PPMS) sponsored by Teva, was reported not to achieve its primary end point. These results have a decisive negative impact on the continued development of laquinimod in PPMS and thus also on Active Biotech's development and financing, as the ability to carry out capital acquisition from current or new owners deteriorated significantly.

In addition, the sales process initiated by the board regarding the company's property in Lund is ongoing but has not yet led to completion. A write-down requirement regarding the value of the property may be applicable. The company has a credit agreement regarding this property. The loan debt amounted to SEK210.8m as on 30 September 2017. The company has a covenant with the lending bank that the company's liquidity should never fall below SEK30m.

Active Biotech has requested that this covenant be waived by the bank in the course of the sales process, together with a deferred amortisation during the same period. However, no agreement has yet been reached with the lending bank.

As a result, unless Active Biotech is able to sell the property at a value generating additional liquidity or another solution is achieved, the company will lack funding to ensure its business the coming 12-month period. The company currently has liquidity deemed necessary to finance operations until the end of the second quarter of 2018.