Benzinga | May 24, 2021 08:02AM EDT

Clene Announces Plan to Expand its Manufacturing Capacity of CNM-Au8, Closing of Up to $30M Debt Facility, and Financing Agreements for $9.25M At-the-Market Private Placement

Clene Inc. (NASDAQ:CLNN) (along with its subsidiaries, "Clene") and its wholly owned subsidiary Clene Nanomedicine, Inc., a clinical-stage biopharmaceutical company dedicated to the treatment of neurodegenerative disease using bioenergetic nanocatalysis, today announced that it is currently in negotiations to lease a 75,000 square foot facility in Elkton, Maryland, a few miles north of its current manufacturing site. Subject to the successful consummation of those negotiations, the site will be redeveloped to support Clene's unique manufacturing needs; this redevelopment will enable the Company to materially increase its manufacturing capacity preparatory to the expected data release in H1 2022 from its Phase 3 registration trial evaluating CNM-Au8 as a treatment for amyotrophic lateral sclerosis (ALS).

In connection with its planned efforts to expand its manufacturing capacity, Clene entered into a Loan and Security Agreement with Avenue Venture Opportunities Fund, L.P. ("Avenue"), a fund of the Avenue Capital Group. The Loan Agreement provides for term loans in an aggregate principal amount up to $30 million, with up to $20 million committed between today and December 31, 2021 ("Tranche 1"), and up to a further $10 million funded between January 1, 2022 and June 30, 2022. On the closing date, Clene received $15 million of funds under the Loan Agreement.

Further, Clene has agreed to sell an aggregate of 960,540 shares of its common stock to certain accredited investors in a private placement (PIPE) financing. Clene anticipates that gross proceeds from the PIPE will be $9.25 million, based on the offering price of $9.63 per share, the last reported sale price of Clene's common stock on the Nasdaq Capital Market on Friday, May 21, 2021. There are no discounts or other warrants associated with the PIPE. Clene has agreed to file with the U.S. Securities and Exchange Commission a registration statement registering the resale of the PIPE Shares within 60 days of the closing date.

Rob Etherington, CEO and President of Clene commented, "Clene already had cash-on-hand to conclude its presently underway and ambitious clinical programs in the difficult-to-treat neurodegenerative diseases of ALS, multiple sclerosis, and Parkinson's disease. These new funds will further strengthen our balance sheet, extend our runway, and enable our important manufacturing expansion to ensure readiness if our Phase 2 and registrational Phase 3 clinical programs read out positive."

Taken together, the net proceeds from the PIPE and Loan Agreement announced today add approximately $24 million to Clene's cash position, incremental to the $48 million as of March 31, 2021. Clene's strengthened cash position will enable an expansion of its CNM-Au8 manufacturing capabilities.

Chad Norman, Senior Portfolio Manager of Avenue's Venture Strategy, said, "Avenue is excited to partner with the team at Clene. The company's platform technology has the potential to revolutionize the way neurodegenerative diseases are treated. Through this transaction, Clene has strengthened its cash position in advance of expected value enhancing milestones and also has the potential to grow with Avenue in the future as its financing needs evolve."

Pursuant to the funding of Tranche 1 of the Loan Agreement, Clene issued to Avenue warrants to purchase up to 115,851 shares of Clene Inc. common stock. The Warrants expire on May 21, 2026 and have an exercise price per share equal to the lower of (i) $8.63, or (ii) the lowest price per share paid by cash investors for Clene common stock issued in the next bona fide round of equity financing prior to March 31, 2022.

The PIPE was led by four current or former Board members of Clene, three of whom have been involved with Clene for many years. David Matlin, Chairman of the Board of Clene and a PIPE investor, commented, "I have been involved with Clene since its founding, and remain enthusiastically hopeful that Clene's lead asset, CNM-Au8, may be able to help patients with neurodegenerative diseases. I am grateful to continue supporting Clene in their many efforts."