ALACHUA – AxoGen, Inc. and PDL BioPharma, Inc. have entered into a structured financing agreement, which will provide $20.8 million to AxoGen. Founded in 2002, AxoGen makes products and technologies that help repair nerve damage, and is located in Alachua’s Progress Corporate Park. Based in Nevada, PDL focuses on intellectual property asset management, investing in new revenue generating assets and maximizing the value of its patent portfolio and related assets.
AxoGen reports that the financing will allow the company to strengthen and accelerate its sales and marketing efforts as well as to explore pipeline opportunities.
The total financing of $20.8 million includes $19.05 million in cash PDL paid to AxoGen on Oct.5, 2012 and $1.75 million PDL paid to AxoGen on Aug. 14, 2012. The firm reports that net proceeds were approximately $14 million after repayment of $5 million in existing debt and payment of transaction related fees and expenses.
A revenue agreement between the two firms calls for an eight year term and provides PDL with royalties based on AxoGen revenues, subject to certain minimum payment requirements beginning in the fourth quarter of 2014 and the right to require AxoGen to repurchase the revenue contract at the end of the fourth year. AxoGen has been granted certain rights to call the revenue contract in years five through eight. John McLaughlin, President and Chief Executive Officer of PDL, was elected to the Board of Directors of AxoGen, Inc. immediately following the closing.
“PDL is an exciting partner for AxoGen. The PDL team has a strong track record of creating commercial value and their knowledge will be an asset as we build AxoGen’s business,” said Karen Zaderej, CEO for AxoGen.
“The PDL transaction provided both operating capital and the ability to pay off AxoGen’s existing bank debt,” said Greg Freitag, AxoGen’s CFO and General Counsel. “We were able to raise significant capital without diluting our outstanding share-base while maintaining a clean capital structure. Furthermore, our agreement provides extensive flexibility for future financing and business development activity.”
AxoGen ’s products offer surgical nerve reconstruction solutions including Avance® Nerve Graft, the only commercially available processed nerve allograft for bridging severed nerves, AxoGuard® Nerve Connector, a coaptation aid allowing for close approximation of severed nerves, and AxoGuard® Nerve Protector, a bioscaffold used to reinforce a coaptation site, wrap a partially severed nerve or isolate and protect nerve tissue. The company sells its products in the United States, Canada, Italy, and Switzerland.
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