Neurologix, Inc. (OTC Bulletin Board: NRGX), a biotechnology company developing innovative gene therapies for disorders of the brain and central nervous system, today announced that it has received additional financing from three of its largest existing investors, or their affiliates: Corriente Advisors; GE Pension Trust; and Palisade Capital Management, LLC. These investors have provided a loan to Neurologix in the aggregate principal amount of $7 million.
The loan bears interest at 10% per annum, matures on October 31, 2011, and is secured by substantially all the assets of the Company. At maturity, the Company will pay an amount equal to 1.2 times the principal amount of the loan, plus accrued interest. In addition, the investors received 7-year warrants exercisable for an aggregate of 2,430,555 shares of the Company’s common stock at an exercise price of $1.44 per share. The investors were granted certain preemptive rights with respect to future financings of the Company and were granted certain registration rights with respect to the shares of the Company’s common stock issuable on exercise of their warrants. The loan will be automatically converted into the preferred stock issued by the Company upon a subsequent preferred equity financing of $30 million or more. MTS Securities, LLC acted as lead placement agent on the financing and Trout Capital LLC acted as an additional placement agent.
“This additional financing reflects the strong support we have from our largest shareholders and the confidence they have in our strategy, technology and ability to bring our novel Parkinson’s gene therapy to market, ” said Clark A. Johnson, President and Chief Executive Officer of Neurologix. “We continue to advance NLX-P101 toward commercialization and will seek additional funding to prepare for and support a pivotal Phase 3 trial.”
Neurologix’s investigational AAV (adeno-associated virus) vector gene therapy, NLX-P101, is a novel, non-dopaminergic approach that uses an inhibitory gene (glutamic acid decarboxylase or “GAD”) to selectively alter the neural circuitry affected in Parkinson’s disease and, thereby, normalize brain physiology. Neurologix’s technology is the only gene-based therapeutic approach in development for Parkinson’s disease which bypasses the dopamine system. The Company earlier this year announced positive results in a Phase 2 trial of NLX-P101 in patients with moderate to advanced Parkinson’s disease.
Neurologix, Inc. is a biotechnology company dedicated to the discovery, development, and commercialization of gene transfer therapies for serious disorders of the brain and CNS. Neurologix’s therapeutic approach is built upon the groundbreaking research of its scientific founders and advisors, whose accomplishments have formed the foundation of gene therapy for neurological illnesses. The Company’s current programs address such conditions as Parkinson’s disease, epilepsy, depression and Huntington’s disease, all of which are large markets not adequately served by current therapeutic options. For more information, please visit the Neurologix website at http://www.neurologix.net/.