Impel Pharmaceuticals’ money miseries have left it looking to lenders for leniency. In breach of a credit agreement, the developer of intranasal drugs has warned it may have to sell assets or file for bankruptcy if it is unable to restructure its deal and secure fresh funding.
Seattle-based Impel went public in 2021 to secure funding to bring its intranasal migraine drug Trudhesa to market. The nasal drug delivery specialist won FDA approval later that year, succeeding where MAP Pharmaceuticals and Allergan failed, but failed to hit its commercial targets. Having begun 2022 targeting 70,000 to 85,000 Trudhesa prescriptions, the company closed out the year with a total of 58,400.
R&D paid the price for the commercial problems as Impel eliminated pipeline programs and reduced its head count by 16% early this year. But the changes have only deferred the development of a potentially terminal problem.
Impel set out the situation in an explanation for its failure to file a quarterly financial report. Under the terms of its credit agreement with Oaktree Fund Administration, Impel cannot be the subject of a “going concern” notice and must always have at least $12.5 million in unrestricted cash. Impel breached the first of the clause in its 2022 annual report but obtained a waiver from its lender.
Now, Impel has breached the second clause. The company alerted investors to the risk of a breach earlier this year but said it planned to address the condition in the second quarter, “either through additional equity financings or through other capital sources, including collaborations with other companies or other strategic transactions.” The hoped-for deal never materialized.
Oaktree, a recurring character in the stories of biotechs nearing the bottom of the barrel, is now in talks with Impel about restructuring its credit agreement. Impel is also in negotiations with Oaktree and other investors about a potential $20 million bridge financing.
If the talks fail, Impel “expects to explore a range of strategic alternatives to maximize stakeholder value, which may include, without limitation, a sale of assets of the company, or the initiation of bankruptcy proceedings.” The situation led Impel to tell the U.S. Securities and Exchange Commission that it cannot file its quarterly financial report on time “without unreasonable effort or expense.”
Shares in Impel fell 38% to 66 cents in premarket trading from a Tuesday closing price of $1.08.