Inventiva announces financing of up to €348 million to advance the NATiV3 Phase 3 MASH study

• Inventiva secures €94.1 million of a multi-tranche equity financing of up to €348 million, subject to satisfaction of specified conditions, from both new and existing investors, and up to $30 million in milestone payments relating to equity financing pursuant to amendment to license and collaboration agreement with CTTQ.
• Proceeds from financing to be primarily used to advance Inventiva’s Phase 3, NATiV3 clinical trial evaluating lanifibranor in patients with MASH.
• More than 1,100 patients randomized in the NATiV3 study evaluating lanifibranor for the treatment of noncirrhotic MASH, with completion of enrollment projected in 1H 2025.
• Appointment to the Board of Directors of Mark Pruzanski, MD, as Chairman and Srinivas Akkaraju, MD, PhD, as director, subject to the next General Meeting of Shareholders’ approval.

Daix (France), Long Island City (New York, United States), October 14, 2024 – Inventiva (Euronext Paris and Nasdaq: IVA) (“Inventiva” or the “Company”), a clinical-stage biopharmaceutical company focused on the development of oral small molecule therapies for the treatment of metabolic dysfunction-associated steatohepatitis (“MASH”) and other diseases with significant unmet medical needs, today announced financing of immediately €94.1 million and up to €348 million (the “Transaction”), subject to satisfaction of specified conditions, to fund the completion of the Phase 3 NATiV3 MASH trial and preparation for the potential filing for marketing approval and commercialization of lanifibranor.

The Transaction was led by New Enterprise Associates, BVF Partners LP and Samsara BioCapital, with the participation of additional existing and new investors including Andera Partners, Deep Track Capital, Eventide Asset Management, Great Point Partners, LLC, Invus, Perceptive Advisors, Schonfeld Strategic Advisors and Sofinnova Crossover I SLP.

Pursuant to the Transaction and subject to shareholder approval at the next general meeting to be convened by December 16, 2024, the Company appointed Mark Pruzanski, MD, as Company Chairman, and Srinivas Akkaraju, MD, PhD, as a director. Up to four additional directors are to be named by each of the other four largest investors, of whom at least two will qualify as independent and would replace existing directors (excluding Frederic Cren, Mark Pruzanski and Srini Akkaraju).

Dr. Mark Pruzanski said: “I have long believed in the therapeutic potential of lanifibranor in MASH and am honored at the prospect of joining Inventiva as Chairman. Based on the previously published Phase 2b NATIVE study results, lanifibranor has a profile that positions it as a possible ‘best in category’ oral drug: its insulin sensitizing and direct antifibrotic benefits make it an ideal therapy for the large population of Type 2 diabetic patients with advanced fibrosis due to MASH who are at the greatest risk of progressing to liver failure. With the support of the equivalent of up to $410 million in funding announced today, I look forward to working with Frederic and the rest of the Board to help transition the Company to maximize its ability to deliver on lanifibranor’s promise.”

J.P. Morgan, TD Cowen, Guggenheim Securities, and LifeSci Capital are acting as placement agents for the financing, and Namsen Capital is acting as Equity Capital Markets Advisor.

Frederic Cren, Chief Executive Officer of Inventiva, stated: "I am very pleased to announce this important financing at a critical juncture for the Company. This reflects the confidence of the participating investors and our partner CTTQ in the value of lanifibranor as a breakthrough therapy for patients suffering from MASH. The total proceeds from the financing will support the MASH program and subsequent filing for marketing approval, along with preparations for the potential commercialization of lanifibranor. I would also like to highlight the benefit Mark’s deep expertise in the MASH field brings and look forward to working with him to ensure the best chance of getting lanifibranor to patients.”

Dr. Nezam (“Nid”) Afdhal, Chief of Gastroenterology, Beth Israel Deaconess Medical Center, Professor of Medicine, Harvard Medical School, said: “Investigators and clinicians remain excited about the prospect of lanifibranor in MASH due to its effect on improving both fibrosis and resolution of MASH. PPAR agonism with lanifibranor has also been demonstrated to improve the metabolic profile and cardiovascular risk factors in our patients with MASH. This dual benefit has the potential to identify lanifibranor as an optimal choice for patients with MASH, significant fibrosis, and diabetes.”

About the Transaction

The Transaction consists of:

(i) the issuance , through a capital increase without preferential subscription rights reserved to a specific category of beneficiaries (“à catégorie de personnes”), of an aggregate of €94.1 million through the issuance of 34,600,507 new ordinary shares of the Company, par value €0.01 per share (the “T1 New Shares”) at a price of €1.35 per T1 New Share, and 35,399,481 prefunded warrants to purchase ordinary shares in the Company at an exercise price of €0.01 per new ordinary share, each giving the right, in the event of exercise, to one new ordinary share (the “T1 BSAs”), subject to the satisfaction of customary closing conditions;

(ii) the issuance, in a second phase, subject to the satisfaction of the T1bis Conditions Precedent (as defined below), through a new capital increase without preferential subscription rights reserved to certain identified investors (“à personne dénommée”) in accordance with article L. 225-138 of the French Commercial Code, of new ordinary shares, par value €0.01 per share or of prefunded warrants to purchase ordinary shares of the Company at an exercise price of €0.01 per new ordinary share, each giving the right, in the event of exercise, to one new ordinary share (the “T1bis New Shares”), for a total gross amount of €21.4 million;

(iii) the issuance, in a third phase, through a new capital increase without preferential subscription rights reserved to certain identified investors (“à personne dénommée”), subject to the T2 Conditions Precedent (as this term is defined below), of ordinary shares (or, in lieu of ordinary shares at the request of each investor, pre-funded warrants) to which share warrants are attached (the “ABSAs”) for a total amount of €116 million . Each ABSA will consist of a number of new ordinary shares with a par value of €0.01 (or prefunded warrants) to be determined by the Company's Board of Directors (the “T2 New Shares”) to which will be attached a number of warrants exercisable at an exercise price of €1.50 (the “T3 BSAs”), subject to the occurrence of the T3 Triggering Event (as defined below), allowing for the subscription of a maximum aggregate amount of €116 million of new ordinary shares.

Settlement of the T1 New Shares and the T1 BSAs is expected to take place on October 17, 2024 (the “Settlement Date”), subject to satisfaction of the customary closing conditions.

Pursuant to the Amendment entered into with Chia Tai Tianqing Pharmaceutical (Guangzhou) CO., LTD. (“CTTQ”) concurrent with the Transaction, if the Company receives commitments from investors to subscribe to an equity raise, in two or three tranches, prior to December 31, 2024, for an aggregate amount of at least €180 million (the “Equity Raise”), CTTQ shall pay to the Company (i) $10 million within 30 days of settlement-delivery of the T1 New Shares and T1 BSAs in the event of the issuance of the first tranche of the Equity Raise to be paid by CTTQ, (ii) $10 million upon the completion of the second tranche of the Equity Raise and (iii) $10 million upon the publication by the Company of positive topline data announcing that any key primary endpoint or key secondary endpoint of the Phase 3 global trial, with any dosage regimen tested in the trial, have been met. Under the terms of the Amendment, the total amount of milestone payments remains unchanged, while the royalties that Inventiva is eligible to receive have been reduced to the low single digits.

Reasons for the issuance and use of the proceeds of the Transaction

The Company intends to use the net proceeds from the issuance of the T1 New Shares and T1 BSAs of €94.1 million gross, or €86.6 million net, together with available cash, as follows: approximately 85% for the clinical program evaluating lanifibranor for the treatment of MASH (“NATiV3”) and, in the event of positive NATiV3 results, for the submission of a new drug application, and the remainder, approximately 15%, for general corporate purposes. The Company has undertaken not to use these proceeds for the early redemption of its financial debt prior to its scheduled maturity or for the repurchase of securities issued as part of the Transaction, subject to the implementation of its liquidity contract with Kepler Cheuvreux.

The Company intends to use the aggregate proceeds from the issuance of the T1 New Shares and of the T1 BSAs (for a gross amount of €94.1 million and a net amount of €86.6 million), from the issuance of the T1bis New Shares (for a gross amount of €21.4 million), if this tranche is issued subject to the satisfaction of the T1bis Condition Precedent, and from the issuance of T2 New Shares (for a gross amount of €116 million) if this tranche is issued subject to the satisfaction of the T2 Conditions Precedent, i.e., a maximum gross amount of up to €232 million if these two tranches are issued, to fund the continuation of the Company’s NATiV3 Phase 3 trial as well as to initiate the compensated cirrhosis study, until the announcement of NATiV3 topline results scheduled for the second-half of 2026. Subject to the satisfaction of the applicable conditions precedent and assuming the exercise of all T3 BSAs, the Company intends to use the gross proceeds of €116 million from the exercise of the T3 BSAs to fund the Company’s pre-commercialization activities, including applications for regulatory approval for lanifibranor, if necessary.

Working capital statement

As of the date of this press release, the Company believes that prior to the Transaction, its net working capital is not sufficient to meet its obligations over the next 12 months. As of June 30, 2024, the Company had cash and cash equivalents of €10.1 million, compared with cash and cash equivalents of €26.9 million and €9.0 million of long-term deposit1 at December 31, 2023.

In July 2024, Inventiva issued royalty certificates for an amount of approximately €20.1 million (the “2024 Royalty Certificates”). Taking into account its current cost structure and expected expenses, and taking into account the proceeds from the issuance of the 2024 Royalty Certificates and the short-term cash preservation measures put in place by the Company, but excluding any proceeds from the Transaction, the Company estimates that its cash, cash equivalents and deposits would enable it to finance its operations until mid-October 2024. Prior to the Transaction, the Company is therefore unable to meet its current obligations over the next 12 months.
To cover its obligations until the beginning of October 2025, based on its current business plan, the Company estimates that its additional cash requirements will amount to between €130 million and €135 million.

The Company also estimates that, prior to the Transaction, it would need approximately €250 million to finance its activities until the topline results from its NATiV3 trial, targeted for the second half of 2026. This estimate includes the estimated €130 to €135 million needed to finance the Company's activities over the next 12 months mentioned above.

Following the issuance of the T1 New Shares and of the T1 BSAs (and excluding the issuance of the T1bis New Shares, the ABSAs and the exercise of the T3 BSAs) for gross proceeds of €94.1 million, or estimated net proceeds of €86.6 million, the Company will not have sufficient net working capital to meet its current obligations over the next 12 months, and will see its financial visibility extended, taking into account the €8.6 million ($10 million) net payment to be made by CTTQ within 30 days of the settlement and delivery of the T1 New Shares and the T1 BSAs, to the end of the second quarter of 2025. The Company estimates that, following the issuance of the T1 New Shares and of the T1 BSAs and taking into account the payment to be made by CTTQ within 30 days of the settlement and delivery of the T1 New Shares and the T1 BSAs, but excluding the issuance of the ABSAs and the exercise of the T3 BSAs, its additional cash requirements in order to meet its current obligations over the next 12 months will amount to €40 million.

If the T1bis Shares (representing a gross amount of €21.4 million) and the ABSAs (representing a gross amount of €116 million) are issued, subject to T1bis Conditions Precedent and T2 Conditions Precedent, as applicable, the Company could extend its financial visibility beyond 12 months.

To the extent the T1bis Conditions Precedent and/or the T2 Conditions Precedent are not satisfied and/or the T3 Triggering Event does not occur and therefore the T1bis Shares and the ABSAs are not issued and the Company does not receive any of the contemplated gross proceeds from the issuance of the T1bis Shares or ABSAs or exercise of the T3 BSAs, the Company will need to raise additional funds to support is business and its research and development programs as currently contemplated through:

• other potential public offerings or private placements of equity or debt instruments; or
• potential strategic options such as business development partnerships and/or licensing agreements.

Main characteristics of the Transaction

The Company's Board of Directors, by virtue of the powers granted to it by the 25th resolution of the shareholders' general meeting of June 20, 2024 (capital increase without preferential subscription rights in favor of specific categories of beneficiaries2) and in accordance with Articles L. 225-138 et seq. of the French Commercial Code (Code de commerce) has decided on October 11, 2024 to proceed with the issuance of T1 New Shares and of T1 BSAs and has determined the final number of T1 New Shares and of the T1 BSAs and their subscription price and exercise price.

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The full press release can be found in the Inventiva website or GlobeNewswire.