Mr. Steve Saviuk reports

VALEO PHARMA AMENDS AGREEMENT WITH NOVARTIS PHARMACEUTICALS CANADA FOR (PR)XIIDRA IN CANADA AND CREDIT FACILITY WITH SAGARD HEALTHCARE ROYALTY PARTNERS, LP

Valeo Pharma Inc. has entered into an amendment of its seven-year commercialization and supply agreement of Xiidra and Simbrinza originally entered into with Novartis Pharmaceuticals Canada Inc. in July, 2022. For sake of clarity Simbrinza is a registered trademark of Novartis AG while Xiidra is a registered trademark of Bausch and Lomb. The use of both trademarks has been authorized only in the context of this press release.

• Original commercialization and supply agreement amended following global divestment of Xiidra;
• Simbrinza remains under Valeo Pharma exclusive promotion and distribution;
• Proceeds from reimbursement to be used for debt reduction purposes;
• Sagard credit facility amended to provide for early repayments and liquidity requirements in fiscal 2024.

As per the amendment, Valeo will continue to distribute Xiidra for the entire transition period, until certain regulatory transfers have been received by the Xiidra global purchaser (effective date of termination). The transition period is expected to continue until approximately Q3 2024.

Valeo will continue to commercialize and promote Simbrinza on an exclusive basis as provided by the commercial and supply agreement with Novartis.

Within 60 days from the effective date of termination, Valeo will be entitled to a reimbursement of a residual portion of the upfront fee paid by Valeo at the time it entered into the commercialization and supply agreement, such reimbursement will be offset by a financial reconciliation with Novartis (the reimbursement). The amount to be received as reimbursement, when received, will be used for partial repayment of the secured term loan (the facility) entered into between Valeo and Sagard Healthcare Royalty Partners LP (Sagard) in July, 2022.

Valeo also announced that it has entered into an agreement with Sagard which is amending the facility (the Sagard amendment), to provide, among other things, for accelerated debt repayment of the facility. Under the Sagard amendment, Valeo will be required to make a first repayment of $10-million by Aug. 31, 2024 (the first repayment). Under the Sagard amendment, Valeo will have the option (the repayment option) at its discretion until Aug. 31, 2024, to make an additional repayment of $5-million (U.S.) under the facility, which amount is currently held in a restricted cash account. Both repayments will be subject to contractually agreed prepayment and exit fees. In addition, under the Sagard amendment, if Valeo elects to proceed with the repayment option, the minimum liquidity and cash balance requirements under the facility have been set at $2-million in cash or cash equivalents.

Corrective statements

During the fourth quarter 2023 analyst call held on Tuesday, Jan. 30, 2024, Steve Saviuk, the chief executive officer of Valeo, mentioned that the reimbursement would be expected to be redeployed to other revenue generating ophthalmology assets. It should be noted that the net amount to be received as reimbursement will not be used for the acquisition of new ophthalmology assets but will be used to finance a portion of the first repayment.

About Valeo Pharma Inc.

Valeo Pharma is a Canadian pharmaceutical company dedicated to the commercialization of innovative prescription products in Canada with a focus on respiratory/allergy, ophthalmology and hospital specialty products. Headquartered in Kirkland, Que., Valeo Pharma has all the required capabilities and the full infrastructure to register and properly manage its growing product portfolio through all stages of commercialization.

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