Novavax repays last of $22M debtWashington Business Journal - by Vandana Sinha Staff Reporter
[07/15/2009]
Novavax Inc. has repaid its outstanding debt, a balance sheet burden that could have brought down a biotech in this capital-starved economic downturn.
Instead, Novavax said today it has paid off the last $5 million of its convertible debt notes. The Rockville company had started the year with $22 million in debt notes, at least half to be repaid in cash, all due today.
For this last repayment, Novavax (NASDAQ: NVAX) said it paid $2.6 million in cash and $2.6 million worth of common stock, totaling more than 1 million shares. In April, Novavax paid off the first $17 million chunk with nearly $12 million in cash and the rest in stock.
“The repayment of the final portion of these convertible notes removes a significant financial liability from the company and results in a further strengthening of the balance sheet,” said Novavax President and CEO Rahul Singhvi. “Elimination of this debt will allow Novavax to focus on the various opportunities ahead.”
Novavax, like many struggling small-cap biotechs largely shut out of investor talks and juggling penny stocks, ventured down creative partnership paths to raise the funds to help pay off its bills. Four months ago, Novavax created an Indian joint venture with a new India-based partner, Cadila Pharmaceuticals Ltd., which also invested $11 million in the local company under the deal. The joint venture, CPL Biologicals Pvt. Ltd., will in part help further develop Novavax’s H1N1 flu vaccine candidate in India.
Also, last month, Novavax partnered with Spanish company Rovi Pharmaceuticals and other Spanish health agencies to license out its vaccine-production technology for the development of flu vaccines abroad. That deal also included a $3 million equity investment by Rovi for Novavax.
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