Cereno Scientific Extends Financial Runway by Extending Loan Maturity Date
Cereno Scientific (Nasdaq First North: CRNO B) (the “Company”), a pioneering biotech developing innovative treatments for common and rare cardiovascular diseases, announced on November 17, 2023, that the Board of Directors of the Company had decided to enter into a loan agreement of up to SEK 90 million issued by Formue Nord Fokus A/S, renamed to Fenja Capital II A/S (“Fenja Capital”), which matures for payment on May 14, 2025. Cereno Scientific announces today, July 10, 2024, that the Board of Directors of the Company has decided to extend financial runway through loan maturity date extension, which will be achieved by entering into a new loan agreement with Fenja Capital replacing the current loan agreement, which means that the loan is extended until March 31, 2026.
Background and rationale for the loan
Cereno Scientific is progressing a pipeline of three innovative drugs; lead candidate CS1, an histone deacetylase (HDAC) inhibitor that acts as an epigenetic modulator in phase II development as a treatment for the rare disease Pulmonary Arterial Hypertension (PAH); phase I candidate CS014, a novel HDAC inhibitor with epigenetic effects being developed for thrombosis prevention and preclinical candidate CS585, an oral, highly potent and selective prostacyclin (IP) receptor agonist that has demonstrated the potential to significantly improve disease mechanisms relevant to cardiovascular disease.
Since signing the first loan agreement in November 2023, Cereno has met several significant milestones including raising SEK 73.6 million via the TO3 warrant program, subscribed to 99.6%, initiating a phase I, first in human, trial of CS014 as well as closed the recruitment of the phase II trial of CS1 in PAH, confirming that results will be shared in Q3 2024. With two drugs in the clinic and closing in on topline results from the phase II trial of CS1 in PAH, Cereno’s Board of Directors has decided to enter into a new loan agreement, extending the loan until March 31st 2026 and to draw down the second payment of SEK 45 million. The injected capital continues to ensure the company's ability to accelerate the development of its three innovative drug candidates toward key milestones. Additionally, it establishes favorable conditions for conducting business development activities, especially discussions concerning partnerships for the Company's development programs.
The proceeds from the loan are, as communicated in November, primarily intended for
• Strengthening and accelerating business development, partnering, and M&A activities in an optimal way.
• Creating favorable conditions for the company to negotiate with potential partners over an extended period.
• Increasing the pace in all three of the company's development programs until each program reaches its next value-adding milestone.
Statement by Sten R. Sörensen, CEO, Cereno Scientific
“We are pleased to have reached an agreement on this updated financing solution with Fenja Capital, extending the Company’s financial runway significantly. This strengthens our position in discussions and potential negotiations with partners and strengthens our ability to further advance our pipeline within rare and common cardiovascular disease for patients with great unmet need.”
Statement by Joakim Söderström, Chairman of the Board, Cereno Scientific
“As the Board of Directors, one of our top priorities is to always ensure financing solutions for the Company that allow for a solid financial runway over time, thereby bolstering shareholder value. With this agreement extending the maturity date of our loan, we not only maximize the chances of securing a strong negotiating position related to business development, partnerships, and mergers and acquisitions but also gain greater operational flexibility.”
Loan terms
The loan amounts to a total of SEK 90 million (the “Loan”) and is divided into two tranches of SEK 45 million each. The first payment was made upon signing of the current loan agreement in November 2023. The second payment will be made upon signing of the new loan agreement. The loan matures under the new loan agreement for payment on March 31, 2026.
Under the new loan agreement, the Loan is subject to a set-up fee of 5.0 percent of the Loan and carries an annual interest rate of STIBOR 3M plus ten (10) percentage points of the amount borrowed. The interest is due at the end of each calendar quarter and shall be paid by the Company on the last business day of the quarter. The Company has the option to repay the Loan before the maturity date without a redemption fee.
The terms of the new loan agreement correspond to the terms of the current loan agreement entered into in November 2023, with the exception of that the Loan matures for payment on March 31, 2026, instead of May 14, 2025. The new loan agreement will replace the current loan agreement.
The Board of Directors of the Company assess the loan terms as being on market terms, inter alia, in light of the fact that the terms correspond to the current loan agreement, and considers that entering into the new loan agreement and thereby extending the Loan is in the best interest of both the Company and its shareholders.
For further information, please contact:
Henrik Westdahl, Director IR & Communications
Email: [email protected]
Phone: +46 70-817 59 96
Sten R. Sörensen, CEO
Email: [email protected]
Phone: +46 73-374 03 74
About Cereno Scientific AB
Cereno Scientific develops innovative treatments for rare and common cardiovascular disease. The lead drug candidate, CS1, is an HDAC (histone deacetylase) inhibitor that acts as an epigenetic modulator with pressure-reducing, reverse-remodeling, anti-inflammatory, anti-fibrotic and anti-thrombotic properties. A Phase II trial is ongoing to evaluate CS1’s safety, tolerability, and efficacy in patients with the rare disease pulmonary arterial hypertension (PAH). A collaboration agreement with global healthcare company Abbott allows Cereno to use their cutting-edge technology CardioMEMS HF System in the trial. Two initiatives performed during the ongoing Phase II trial have shown positive findings suggesting the potential clinical benefit of CS1 in PAH patients. These initial findings are, however, not a guarantee of the final trial results that are expected in Q3 2024. Since January 2024, we are delighted that the FDA´s Expanded Access Program will enable patients with PAH, a serious life-threatening disease condition, to gain access to CS1 where no comparable alternative therapy options are available. Cereno’s pipeline comprises two additional programs in development through research collaborations with the University of Michigan. Investigational drug CS014 is an HDAC inhibitor in Phase I development as a treatment for arterial and venous thrombosis prevention. The innovative drug candidate represents a groundbreaking approach to antithrombotic treatment. CS014 is a new chemical entity with a multi-fold mechanism of action as an epigenetic modulator – regulating platelet activity, fibrinolysis, and clot stability for the prevention of thrombosis without an increased risk of bleeding as documented in preclinical trials. On 28th of June, 2024, Cereno initiated a first-in-human Phase I trial of CS014. Preclinical candidate CS585 is an oral, highly potent and selective prostacyclin (IP) receptor agonist that has demonstrated the potential to significantly improve disease mechanisms relevant to cardiovascular disease. While CS585 has not yet been assigned a specific indication for clinical development, preclinical data indicates that it could potentially be used in indications like Pulmonary Hypertension and thrombosis prevention without increased risk of bleeding. CS585 was in-licensed from the University of Michigan in 2023. The Company is headquartered in GoCo Health Innovation City, in Gothenburg, Sweden, and has a US subsidiary; Cereno Scientific Inc. Based in Kendall Square, Boston, Massachusetts, US. Cereno is listed on the Nasdaq First North (CRNO B). The Certified Advisor is Carnegie Investment Bank AB, [email protected]. More information is on www.cerenoscientific.com.
