Drawdown of loan from Endo Inc, and repayment of amounts due to Elan Ltd
24 August 2004
Vernalis plc (LSE:VER, Nasdaq: VNLS) announced today that on 23 August 2004 it has drawn down the $50m loan from Endo Pharmaceuticals Holdings Inc.(NASDAQ: ENDP) (“Endo”) agreed as part of the Licensing deal for the North American rights to FrovaTM which completed on 17 August 2004.
The Loan has been principally used to make payment in full and final settlement of the amounts due to Elan Pharma International Ltd (“Elan”) of $45 million. This sum was to be repayable as to $20 million on 31 December 2004 and $25 million on 31 December 2005. Vernalis has received a discount of $6 million for early settlement of the loan. The payment to Elan was $43,485,047 which includes a payment of $4,485,047 for inventory with the balance of the Endo loan, $6,514,953 being available for Vernalis’ general corporate purposes.
The loan is secured against the revenues receivable by Vernalis under the licence agreement. At Endo’s election, Endo are able to offset $20 million of the MAM approval milestone of $40 million and 50 per cent of all royalties to be paid to Vernalis to repay the loan. To the extent not previously repaid, the loan is due in full after five years. Interest is at the rate of 5 per cent per annum payable semi-annually with Vernalis having the option to defer payment of interest and increase the loan outstanding each time an interest payment becomes due.
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Enquiries:
Vernalis plc
Simon Sturge, Chief Executive
Officer
Tony Weir, Chief Financial Officer
+44 (0)118 977 3133
Brunswick Group (for analyst, financial media
enquiries)
Jon Coles; Wendel Carson
+44 (0)20 7404 5959
