Iterum Therapeutics (ITRM) Announces $52 Million Private Placement

Iterum Therapeutics plc (Nasdaq: ITRM) (the “Company”), a clinical-stage pharmaceutical company focused on developing next generation oral and IV antibiotics to treat infections caused by multi-drug resistant pathogens in both community and hospital settings, today announced that it has entered into a securities purchase agreement, dated as of January 16, 2020, with a group of accredited investors for an approximately $51.9 million private placement, which is expected to close within five business days of the execution date, subject to the satisfaction of customary closing conditions.

Pursuant to the terms of the securities purchase agreement, Iterum Therapeutics Bermuda Limited, a wholly-owned subsidiary of the Company (the “Issuer”), will sell units (the “Units”) comprised of approximately (i) $51.9 million aggregate principal amount of its 6.500% exchangeable senior subordinated notes due 2025 (the “Exchangeable Notes”) and (ii) $0.1 million aggregate principal amount of its limited recourse royalty-linked senior subordinated notes (the “RLNs” and, together with the Exchangeable Notes, the “Securities”). Each Unit will consist of $1,000 principal amount of Exchangeable Notes and 50 RLNs. The Units will be sold at a price of $1,000 per Unit at an initial exchange rate of 1,000 shares per $1,000 principal amount of Exchangeable Notes (equivalent to an initial exchange price of approximately $1.00 per ordinary share). The Exchangeable Notes will be exchangeable for cash, ordinary shares of the Company or a combination of both, pursuant to the terms and conditions of the indenture governing the Exchangeable Notes. The RLNs will entitle holders to payments based on a percentage of the Company’s net revenues from potential U.S. sales of specified sulopenem products pursuant to the terms and conditions of the indenture governing the RLNs. Pursuant to the indenture governing the RLNs, the potential aggregate payments for all RLNs will either be 15% or 20% of net revenues from U.S. sales of such products, depending on the indication potentially approved by the U.S. Food and Drug Administration, and will be capped at eight times the aggregate investment amount for all Units. The Issuer’s obligations under the Securities will be guaranteed by the Company and its wholly-owned subsidiaries.

The Company expects to use the net proceeds from the private placement to fund the continued clinical development of sulopenem and the management of regulatory filings, and for working capital and general corporate purposes.

The private placement was led by Sarissa Capital Management LP, with participation from other new and existing investors, including RA Capital Management and entities affiliated with certain of the Company’s board members. SVB Leerink acted as the exclusive placement agent to the Company in connection with the private placement.

The securities to be sold in the private placement have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state or other applicable jurisdiction’s securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state or other jurisdictions’ securities laws. There can be no assurance that the Company will be able to complete the private placement on the terms described herein or at all.

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