NEW HAVEN, Conn., July 6, 2009 (GLOBE NEWSWIRE) -- Achillion Pharmaceuticals, Inc. (Nasdaq: ACHN ), a leader in the discovery and development of small molecule drugs to combat the most challenging infectious diseases, today announced that it has entered into a standby equity distribution agreement ("SEDA") with YA Global Master SPV, Ltd, a fund managed by Yorkville Advisors ("YA"), whereby Achillion has the option, at its sole discretion, to sell up to $15 million of common stock to YA.
Under the SEDA, Achillion will be able to sell, and YA will be obligated to buy, up to $300,000 of Achillion common stock in any five-day period. Prior to drawing down its first advance under the SEDA, Achillion is obligated to file a registration statement with the Securities and Exchange Commission covering resale of the shares[see comment below]. The SEDA has a two year term and may be terminated at any time by Achillion. The price of the common stock sold under the SEDA will be calculated on the basis of the volume-weighted average price of Achillion shares, less a 5% discount[volume-weighted over what time period?] There are no warrants, options or banking fees associated with the transaction, nor are there any restrictions on Achillion's ability to explore and enter into other potential financing agreements. YA is not permitted to short sell or enter hedging transactions related to Achillion shares[but they are permitted to flip the shares ASAP]. In connection with the SEDA, Achillion paid YA a one-time fee of $25,000 and issued YA 191,302 shares of common stock as a commitment fee.
Mary Kay Fenton, Vice President and Chief Financial Officer of Achillion Pharmaceuticals noted, "We have entered a period of increased activity in our HCV programs, and the SEDA provides us with financial flexibility to explore multiple program options. We currently have sufficient cash resources for the coming year and have no immediate intention to draw on this equity facility. Yet, as we continue partnering discussions for several of our programs, we expect that access to this form of capital should strengthen our financial and negotiating position."
Dr. Michael J. Nowak, Head of the Healthcare Group and Managing Director at Yorkville, led YA's commitment to Achillion. Dr. Nowak stated, “We provide innovative financing tools for publicly traded growth companies.”[There’s nothing especially innovative about a standby equity agreement—lots of companies have them.]“With Achillion's pipeline of exciting HCV compounds and with the milestones those compounds may achieve over the term of this agreement, we're especially delighted to be able to work with Achillion.”[LOL—you probably couldn’t care less about ACHN’s HCV pipeline; the standby agreement gives you registered shares at a discount, so you can flip them for an immediate profit if you choose to do so.]‹
ACHN has completed Phase 1a of ACH-1625, a protease inhibitor for the treatment of HCV infection, and has begun dosing HCV-infected patients in the Phase 1b segment of the trial. ACH-1625 was safe and well-tolerated in both the single and the multiple ascending dose segments.
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