SAN FRANCISCO, CA and TORONTO, ON, Jan. 12, 2022 (GLOBE NEWSWIRE) -- Claritas Pharmaceuticals, Inc. (TSX VENTURE: CLAS and OTC: KALTF) (the "Company" or "Claritas") is pleased to announce it has entered into an agreement (the “Agreement”) with Alumina Partners (Ontario) Ltd. (“Alumina”), an affiliate of Alumina Partners, LLC, a New York based private equity firm, under which Alumina has agreed to provide, at the option of the Company, up to $5 million in equity financing over a period of 2-years.
Highlights:
- The Agreement will provide Claritas with two-years of working capital, with initial proceeds allocated to the remaining costs ofthe Phase 1 clinical study of R-107, which the Company expects to complete in Q1 2022.
- Future proceeds will be allocated to the costs of the Phase 2a study of R-107 in pulmonary arterial hypertension (“PAH”), which the Company expects to initiate by Q3 2022; and the Phase 2a study of R-107 in persistent pulmonary hypertension of the newborn (“PPHN”), which the Company expects to initiate by year-end 2022.
- Under the Agreement, Claritas may draw down, at its option and subject to certain conditions, cash tranches of up to $250,000. Each tranche shall be a private placement of units, comprised of one common share and one common share purchase warrant. The units will be issued at a discount of 15% to 25% from the closing market price at the time each tranche is funded, and the exercise price of the warrants will be at a 25% premium over the market price at the time of issuance.
- There was no finder’s fee associated with this transaction. Each tranche of units issued will be subject to the acceptance of the TSX Venture Exchange, and the securities issued will be subject to the customary 4-month and one day hold period.
Claritas is currently developing R-107, its proprietary nitric oxide-releasing compound, for the treatment of COVID-related lung diseases, including COVID-related ARDS, and COVID-related sepsis, as well as for the treatment of PAH and PPHN.
Claritas intends to seek non-dilutive governmental grant funding to develop R-107 for the treatment of COVID-related ARDS and COVID-related sepsis. The Company will apply for such funding with the Biomedical Advanced Research Development Authority (“BARDA”), an agency within the U.S. Department of Health and Human Services. More than USD $15 million of the early-stage development costs for R-107 were already funded under a BARDA contract, and the Company will apply for a new BARDA contract to fund the Phase 2 and Phase 3 clinical studies of R-107 in COVID-related ARDS and COVID-related sepsis.
The resources available to the Company under the Agreement with Alumina will be used to move forward with the development of R-107 for treatment of both PAH and PPHN, advancing R-107 into Phase 2a clinical studies next year in both indications.
"We are excited that Alumina recognizes the potential of R-107, our proprietary nitric oxide-releasing compound being developed for pulmonary disease in adults and newborns, as well as for COVID-related lung disease. Alumina is prepared to provide up to $5 million of working capital to ensure that the Company can deliver on this potential. This strong financial backing will provide us with the flexibility and resources we need to achieve expected value-driving milestones over the next 2-years,” stated Robert Farrell, President and CEO.
Mr. Farrell went on to say, “The advantage of this transaction structure is that the Company will not take down the entire $5 million at this time, while our share price is low, and the Company is undervalued. Rather, in order to minimize shareholder dilution, we will only judiciously access this financing facility over time as funds are required. If, as expected, we achieve the value-driving milestones mentioned, and if our share price and valuation reflect this value, we will be issuing fewer shares and warrants per dollar of funding accessed under this facility. We view Alumina as a partner in helping us to build value, and we view this financing facility as a win-win transaction for the Company and its shareholders.”
“We are delighted to support Claritas as they work to bring R-107 to market,” said Adi Nahmani, Alumina’s Managing Member. “We are certainly not the first to recognize the need for a nitric oxide-releasing therapeutic for a number of applications, both chronic and acute. Indeed, much of the early development was funded by BARDA, the DARPA of life sciences. In the face of the evolving challenges posed by COVID, however, the need for R-107 is that much more urgent, and the applications that much more promising. We are pleased to be investors in this technology, and look forward to seeing management progress through the clinical trials required to add this compound to the modern medical pharmacopeia.”