Repros Therapeutics (NasdaqGM:RPRX) today announced that the Company has entered into a settlement agreement with its major creditors for the large majority of the debt incurred associated with the recently suspended Proellex® clinical program.
Previously the Company announced in early August 2009 that it had voluntarily suspended dosing of all patients in its Proellex clinical trials. The FDA subsequently notified Repros that the Proellex program was placed on full clinical hold due to the observation of increased liver enzymes in a number of patients treated with Proellex. These elevated liver enzyme observations occurred during the time that the Company was attempting to raise additional capital to fund its continued operations and the Proellex program in particular. The liver enzyme issue resulted in a failure of the fund raising activity and led to a situation where the Company had more debt than cash. If this situation were to remain unresolved, Repros would face bankruptcy.
The creditor settlement allows for Repros to repay ten of its major creditors a total of nearly $9 million of debt incurred during the execution of the Proellex clinical studies. The creditors include clinical research organizations, clinical investigator sites, clinical laboratories and a manufacturer of clinical supplies. Repros will repay the debt with a mixture of cash and unregistered stock. The unregistered stock is priced at $1.10 which is the last transaction price of Repros stock at the close of regular trading on Thursday, October 29, 2009. The settlement calls for $2,849,051 to be paid in cash and $6,054,233 to be paid in unregistered stock. Repros will use its reasonable best efforts to register the stock in a timely fashion. The settlement also provides for the dismissal with prejudice of pending lawsuits brought against Repros by creditors participating in the agreement. In addition the Company is concurrently attempting to resolve claims from approximately another 60 smaller creditors that are owed a total of about $1.6 million.