Windtree Therapeutics (NASDAQ:WINT) Eliminates $15 Million Contingent Liability To Deerfield Management Company

Rhea-AI Summary

Windtree Therapeutics (NASDAQ:WINT) has announced a significant agreement with Deerfield Management Company to retire a $15 million liability associated with its Aerosurf drug and device combination treatment for premature infants. The company has strengthened its financial position and balance sheet, with no significant debt and increased shareholder equity. Windtree is also targeting Phase 3 readiness in cardiogenic shock with its lead asset istaroxime, which has shown promising results in a phase 2 study.

Financial Analyst

The move by Windtree Therapeutics to retire a $15 million contingent liability with Deerfield Management Company is a significant financial restructuring event. By issuing shares and making a cash payment, Windtree is opting to clean up its balance sheet, which can be attractive to investors seeking companies with lower debt levels. The reduction in contingent liabilities can improve financial ratios, such as the debt-to-equity ratio, which is closely monitored by investors as it indicates the company's financial leverage and stability. This could potentially lead to a re-rating of the stock by the market.

However, the issuance of additional shares may lead to dilution of existing shareholders' equity. Investors will need to weigh the benefits of a stronger balance sheet against the dilutive effects of increased share count. Additionally, the agreement includes a future cash payment, which could impact liquidity. The timing of this liability retirement, ahead of anticipated later-stage clinical trials, suggests strategic financial management aimed at ensuring the company is well-positioned to handle future capital requirements.

Medical Research Analyst

Windtree's focus on advancing its lead asset, istaroxime, is noteworthy for stakeholders. The drug's progression into later-stage clinical trials for cardiogenic shock, a condition with high morbidity and mortality rates, indicates potential market demand and the opportunity for Windtree to address an unmet medical need. The positive phase 2 study results and the lack of competing drugs in development could give Windtree a first-mover advantage in this therapeutic area.

Furthermore, the company's partnership with Lee's Pharmaceuticals for a regional license could provide non-dilutive revenue, which is beneficial for the company's financial health. Non-dilutive funding mechanisms are crucial for biotech companies as they allow for the advancement of the drug pipeline without sacrificing equity. The potential fast-tracking of regulatory approval for istaroxime, as suggested by the lower cost and speed of phase 3 requirements, could accelerate its time to market, which is an important consideration for investors looking at long-term value creation.

Market Research Analyst

The strategic decisions made by Windtree, including reducing its cash burn rate and strengthening its balance sheet, are indicative of a company positioning itself for growth. The company's anticipation of phase 3 readiness for its cardiogenic shock treatment in 2024 suggests confidence in its clinical development pathway. Market research indicating a high desire among doctors for new treatments in this area underscores the potential for istaroxime to capture significant market share upon successful development and approval.

Investors should note the strategic importance of the company's engagement in global cardiogenic studies and business development activities. These efforts may enhance the company's profile in the biopharmaceutical sector and could lead to future partnerships or funding opportunities. The unique market position of istaroxime, if successful, could significantly impact Windtree's valuation and future revenue streams.

WARRINGTON, PA / ACCESSWIRE / January 26, 2024 / Windtree Therapeutics (NASDAQ:WINT) announced an agreement with affiliates of biopharma investor Deerfield Management Company to fully retire a $15 million contingent liability associated with Windtree's Aerosurf®, a drug and device combination treatment for premature infants with respiratory distress syndrome.

No Significant Debt On The Balance Sheet And Increased Shareholder Equity Ahead Of Windtree's Anticipated Later-Stage Clinical Trials

"We appreciate the support of Deerfield in our efforts to strengthen our financial position with the completion of this transaction and the expected elimination the $15 million contingent liability. As a result, we believe we have meaningfully strengthened and simplified our balance sheet," said Craig Fraser, Windtree's President and Chief Executive Officer. "In addition, our lead asset, istaroxime, is progressing in two ongoing clinical trials in cardiogenic shock and we recently announced a new regional license with Lee's Pharmaceuticals intended to initiate Phase 3 work in acute heart failure and potentially provide non-dilutive revenue. Along with significantly cutting our cash burn rate since the second half of 2022, I believe we have strengthened the company through recent transactions such as this one. We look forward to keeping our shareholders updated on our progress."

In exchange for Deerfield terminating its rights to receive any milestone payments, Windtree agreed to issue Deerfield 608,272 shares of its common stock and to pay Deerfield a $100,000 cash payment upon execution of the agreement. In addition, Windtree agreed to pay Deerfield an additional $100,000 on the earlier of (i) January 24, 2025, or (ii) Windtree receiving a specified amount of gross proceeds from debt or equity financings occurring on or after the agreement date.

Windtree's public filings can be viewed on its corporate website www.windtreetx.com.

Windtree Targeting Phase 3 Readiness In Cardiogenic Shock

Windtree reports that a recently completed positive phase 2 study on istaroxime as a treatment for early cardiogenic shock demonstrated improvement in both blood pressure and cardiac function, which are in a critically low state and result in high morbidity and mortality in cardiogenic shock. There is likely a high unmet need in the potential market for istaroxime because market research shows doctors have a high desire for drug innovation to treat cardiogenic shock. Adding to the positive story for Windtree, there are no other known drugs in development for cardiogenic shock and the regulatory approval pathway may provide requirements that cost less and are able to be completed faster than typical cardiovascular phase 3 programs.

If approved for cardiogenic shock, istaroxime's efficacy and safety profile could make it a standard treatment to improve both blood pressure and heart function. Windtree is in the process of starting a small extension study following the positive phase 2 data for dose optimization and also has begun start-up activity in a second small phase 2 study with cardiogenic shock patients one stage more severe called SCAI Stage C. These two small studies are expected to move the cardiogenic shock development program for istaroxime to phase 3 readiness in 2024.

"Windtree is highly engaged with two global cardiogenic studies as well as business development activity. We look forward to sharing our progress and especially our data and milestones over the next few quarters," Fraser said in a statement.

Featured photo by Wance Paleri on Unsplash.

Contact:

Matt Epstein
mepstein@kendallir.com

SOURCE: Windtree

View the original press release on accesswire.com

What is the ticker symbol for Windtree Therapeutics?

The ticker symbol for Windtree Therapeutics is WINT.

What was the agreement announced by Windtree Therapeutics with Deerfield Management Company?

Windtree Therapeutics announced an agreement with Deerfield Management Company to fully retire a $15 million contingent liability associated with its Aerosurf drug and device combination treatment for premature infants.

What is the lead asset of Windtree Therapeutics?

The lead asset of Windtree Therapeutics is istaroxime.

What is the target of Windtree Therapeutics in relation to cardiogenic shock?

Windtree Therapeutics is targeting Phase 3 readiness in cardiogenic shock with its lead asset istaroxime.

What positive results were reported by Windtree Therapeutics in the phase 2 study of istaroxime?

The phase 2 study on istaroxime as a treatment for early cardiogenic shock demonstrated improvement in both blood pressure and cardiac function.