Transgene Strengthens Its Balance Sheet via Equity Conversion of Current Account Advance From TSGH

Transgene (Euronext Paris: TNG), announces the conversion into equity of 32,999,999.57 euros of debt, drawn down under the outstanding current account advance with its majority shareholder TSGH (a subsidiary of Institut Mérieux) under the terms of the agreement with TSGH first signed in 2023. Following this conversion, TSGH’s ownership in Transgene will increase from 59.7% to 69.1%.

Dr. Alessandro Riva, MD, Chairman and CEO of Transgene, commented: “The long-term support of our principal shareholder has been crucial in financing our research and development activities. This conversion allows us to strengthen our balance sheet by significantly reducing our debt and associated financing costs. With improved financial flexibility, we approach the second half of 2024 with the expectation of announcing significant progress and results across all our innovative immunotherapy programs.”

In September 2023, Transgene signed a current account advance agreement with TSGH (Institut Mérieux) for €36 million, which was increased to a maximum of €66 million in March 2024. This current account advance bears interest at the average monthly rate of 3-month Euribor plus 1% per annum, up to the maximum tax-deductible rate. However, advances allocated for the offset of TSGH subscription to a capital increase of Transgene carried out before September 20, 2024, are excluded from the basis for calculating interest. The company is able to use this financing as it requires until December 31, 2025. For this reason, TSGH and Transgene have mutually agreed to proceed with the Reserved Capital Increase before the summer break.

As of the date of the prospectus issued in conjunction with this transaction, Transgene has drawn €35.6 million from the current account advance. Following the Reserved Capital Increase, non-current financial debt and total net financial debt (based on cash and cash equivalents as of June 30, 2024) will be €5.8 million and €(8.8) million, respectively, compared to €36.1 million and €21.5 million as of June 30, 2024 (before the impact of this transaction). Transgene confirms its financial visibility until the fourth quarter of 2025.

Michel Baguenault de Puchesse, Director of Transgene and CEO of Institut Mérieux, said: “Institut Mérieux is committed to supporting Transgene’s growth as an independent company. The conversion of outstanding debt under the existing current account advance underlines the strength of this long-term partnership. The promise of therapeutic cancer vaccines has never been greater, and we believe Transgene has the opportunity to become a key player in the field, with the potential to improve and extend the lives of many cancer patients through successful development of its pipeline.”