IRLAB Bolsters Value Creation with Extended and Expanded Debt Financing

IRLAB Therapeutics AB (Nasdaq Stockholm: IRLAB A), a Swedish biopharmaceutical company focused on developing novel treatments for Parkinson's disease, has strengthened its financial position and value creation capabilities through extended and expanded debt financing. The company announced on February 18, 2025, that it has extended its existing loan from Fenja Capital to SEK 55 million, with a maturity date of June 30, 2026, at the latest. Additionally, IRLAB has raised new loans from some of its major shareholders for a total of SEK 22.4 million. These moves provide the company with increased financial flexibility and resilience during a period with significant opportunities for value creation.

The extended and expanded debt financing allows IRLAB to maintain its rapid pace of drug project development and strengthen its position in ongoing business discussions. The company's CFO, Viktor Siewertz, stated that the loan extension and new shareholder loans ensure the ability to maneuver and negotiate during a period with significant opportunities for value creation for shareholders. The additional liquidity boosts IRLAB's financial flexibility in the short term and increases its ability to maintain a rapid pace in the development of its drug projects.

The extended loan from Fenja Capital carries a set-up fee of 5 percent, an annual interest rate of STIBOR + 10 percentage points (with a minimum of 13 percent), and a fee of 2 percent for extending the maturity to June 30, 2026. The new shareholder loans also carry interest rates and fees, which contribute to the company's long-term financial risk profile. However, the loans are subordinated to the Fenja Capital loan, which means that in case of liquidation, the Fenja Capital loan will be repaid first, followed by the shareholder loans. This structure reduces the risk to the shareholder lenders but increases the risk to IRLAB, as it may have to repay these loans before other creditors in case of financial distress.

The loan extension and new shareholder loans have several strategic implications for IRLAB's ongoing drug development projects and partnerships. The liquidity boost is expected to enhance IRLAB's negotiating power in business discussions, enabling the company to secure more favorable terms for partnerships and collaborations. This could lead to more rapid development of its drug projects and potential acceleration of Phase III trials for mesdopetam, a Phase III-ready drug project for the treatment of levodopa-induced dyskinesias in Parkinson's disease patients. The additional funds will also enable IRLAB to maintain its rapid pace in the development of its other drug projects, such as pirepemat and IRL757.

The terms of the Fenja Capital loan and the shareholder loans align with market conditions, considering the current risk level and the potential value creation opportunities for IRLAB. The loan terms are considered market competitive by IRLAB's Board of Directors, and they believe that taking the loan is in the best interest of both the company and its shareholders. The extended and expanded debt financing provides IRLAB with increased financial resilience, enhanced negotiating power, limited dilution, and market validation, all of which contribute to the company's potential for increased shareholder value.

In conclusion, IRLAB Therapeutics AB has strengthened its value creation capabilities through extended and expanded debt financing, providing the company with increased financial flexibility and resilience during a period with significant opportunities for value creation. The loan extension and new shareholder loans have several strategic implications for IRLAB's ongoing drug development projects and partnerships, and the terms of the loans align with market conditions, contributing to the company's potential for increased shareholder value.