Onxeo Enters into Settlement Agreement with SpePharm and SpeBio
- Settlement agreement fully resolves long-lasting litigation between the parties and all related proceedings
- Settlement terms have no impact on Onxeo’s expected cash runway
Paris (France), February 11, 2020 – 7:00 pm CET – Onxeo S.A. (Euronext Paris, NASDAQ Copenhagen: ONXEO), (“Onxeo” or “the Company”), a clinical-stage biotechnology company specializing in the development of innovative drugs targeting tumor DNA Damage Response (DDR), in particular against rare or resistant cancers, today announces it has entered into an agreement to settle (“the Settlement Agreement”) the remaining actions in the litigation which began in 2009 between Onxeo on the one hand and SpePharm and SpeBio B.V. on the other hand. SpeBio B.V. is a joint-venture managed by SpePharm, which was dedicated to the distribution in Europe of Loramyc®, a product sold by Onxeo to Vectans Pharma in July 2017.
Two remaining actions were pending following the decision of the Paris Court of Appeal in December 2018. On the one hand, Onxeo had appealed this decision before the French Supreme Court. On the other hand, the proceedings before the Court of Arbitration of the International Chamber of Commerce (ICC), which had been suspended whilst awaiting the decision of the French Courts, had resumed.
The Settlement Agreement includes immediate complete and final withdrawal of these last two pending actions as well as any and all future claims or causes of action between the parties linked to their previous disputes.
In return, Onxeo immediately sells its shares in SpeBio to SpePharm at their nominal value, thereby transferring its share of the cash of the joint venture amounting to approximately €3.5m and will pay 15 to 20% of net cash received on future commercial agreements concerning Onxeo’s R&D assets for a total cumulative amount of €6m within the next 4 years.
As SpeBio’s cash was not taken into account in Onxeo’s cash position, the Settlement Agreement’s terms have no impact on the Company’s cash runway of Q3 2020, nor on Onxeo’s current operational plan.
This agreement settles a dispute which had no more relation to the Company’s current activities and strategy and will enable the Company to focus on the development of its assets in the field of DNA Damage Response.
The signing of this agreement after the end of the 2019 financial year will result in the recognition of the following provisions in the consolidated accounts at December 31, 2019:
- A provision for depreciation of equity securities in the amount of 3.6 million euros, as a result of the sale of SpeBio shares at their nominal value.
- A provision for risks of 6 million euros, corresponding to the additional payments linked to the Group's future license agreements.
The total charge will be booked under “other operating income and expenses”.