Genkyotex Extends Conversion Period for Outstanding €1.6 Million Convertible Debt by 12 Months

ARCHAMPS, France, (GLOBE NEWSWIRE) -- Genkyotex (Euronext Paris & Brussels: FR0013399474 – GKTX), a biopharmaceutical company and the leader in NOX therapies, announced today that it agreed with Yorkville Advisors Global, a U.S.-based investment manager (“Yorkville” or the “Investor”), on a 12-month extension of the conversion period for its remaining €1.6 million convertible notes held by Yorkville. This has been achieved by Genkyotex buying-back from Yorkville on August 19, 2019 its remaining €1.6 million convertible notes due August 20, 2019, and simultaneously issuing to Yorkville new convertible notes equivalent to the remaining existing convertible notes and due August 20, 2020.

Elias Papatheodorou, CEO of Genkyotex, commented: “We are very pleased by this 12-month period extension, which will provide us with increased financial flexibility as we continue to formulate the development plan for our lead product candidate, setanaxib. Data generated to date for this promising asset have demonstrated that setanaxib could become an important therapeutic solution in multiple inflammatory and fibrotic indications. As such, we intend to further evaluate setanaxib in late-stage clinical trials in order to bring it to patients in need as expeditiously as possible.”

“This extension agreement is indicative of our continued support of Genkyotex and its corporate strategy,” said Saad Gilani, Head of Healthcare Investments at Yorkville. “Based on the clinical data generated to date, we see the potential of Setanaxib to be a treatment in several inflammatory and fibrotic conditions.”


Legal framework of the transaction

The Investor agreed to sell on August 19, 2019 (the “Closing Date”) to Genkyotex its remaining €1.6 million convertible notes due August 20, 2019 (the “2018 OCA”), and simultaneously subscribe by way of set-off to 160 notes convertible into ordinary shares of Genkyotex, due 20 August 2020, in a single tranche of € 1.6 million in nominal value (the “Commitment”) corresponding to the value of and with terms and conditions equivalent to the remaining 2018 OCA (the “Convertible Notes” or “OCA”).

The OCA tranche has been fully subscribed by YA II PN, LTD, an investment fund managed by Yorkville Advisors Global LP, within the framework of the 16th resolution of the shareholders’ general meeting of the Company convened on June 13, 2019 (the “Shareholders’ Meeting”) which has authorized the board of directors of the Company (the “Board of Directors”), to issue shares and/or any securities giving access to the share capital or to debt securities of the Company without preferential subscription rights, to several categories of investors.

The maximum nominal amount of shares to be issued pursuant to such authorization is up to EUR 4,000,000, this limit being included in the global cap of EUR 4,000,000 provided for by the 21th resolution of the shareholders’ meeting dated June 13, 2019. The abovementioned authorizations relating to the issuance of shares and debt securities have not been used by the Company before August 19, 2019.
In its meeting held on August 5, 2019 (the “Board Meeting”), the Board of Directors has approved the principle of purchasing back the outstanding 160 2018 OCA issued to Yorkville on August 20, 2018 (but not the attached warrants issued on such same date which shall remain held by the Investor) and, within the limits of the authorization granted by the Shareholders’ Meeting of June 13, 2019 in its 16th resolution, has granted all powers to the chief executive officer (the “CEO” or “Directeur Général”) of the Company to issue 160 notes convertible into new shares giving access to new shares for a total principal amount of € 1.6 million.

The terms and conditions of this transaction, the main characteristics of the financial instrument, and the Investor’s obligations are detailed as an appendix to the present press release.
This transaction is not subject to the filing of a prospectus with the AMF.

Indicative timetable

Issuance on August 19, 2019, by the CEO of the Company, using the powers received from the Board of Directors, to the Investor of 160 Convertible Notes for a total principal amount of €1.6 million.


Genkyotex is the leading biopharmaceutical company in NOX therapies, listed on the Euronext Paris and Euronext Brussels markets. Its unique platform enables the identification of orally available small-molecules which selectively inhibit specific NOX enzymes that amplify multiple disease processes such as fibrosis, inflammation, pain processing, cancer development, and neurodegeneration. Genkyotex is developing a pipeline of first-in-class product candidates targeting one or multiple NOX enzymes. The lead product candidate, setanaxib (GKT831), a NOX1 and NOX4 inhibitor has shown evidence of anti-fibrotic activity in a Phase II clinical trial in primary biliary cholangitis (PBC, a fibrotic orphan disease) and Genkyotex is planning to initiate a Phase III clinical trial in PBC following its positive Phase II results. setanaxib is also being evaluated in an investigator-initiated Phase II clinical trial in Type 1 Diabetes and Kidney Disease (DKD). A grant from the United States National Institutes of Health (NIH) of $8.9 million was awarded to Professor Victor Thannickal at the University of Alabama at Birmingham (UAB) to fund a multi-year research program evaluating the role of NOX enzymes in idiopathic pulmonary fibrosis (IPF), a chronic lung disease that results in fibrosis of the lungs, the core component of the program will be to conduct a Phase 2 trial with the setanaxib in patients with IPF. This product candidate may also be active in other fibrotic indications.
Genkyotex also has a versatile platform well-suited to the development of various immunotherapies (Vaxiclase). A partnership covering the use of Vaxiclase as an antigen per se (GTL003) has been established with Serum Institute of India Private Ltd (Serum Institute), the world’s largest producer of vaccine doses, for the development by Serum Institute of cellular multivalent combination vaccines against a variety of infectious diseases.

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