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The EIB and GeNeuro Sign a EUR 25 Million Credit Line Backed by InvestEU to Support Clinical Developments Against Long-COVID

The EIB and GeNeuro Sign a EUR 25 Million Credit Line Backed by InvestEU to Support Clinical Developments Against Long-COVID

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  • GeNeuro SA, through its R&D subsidiary in Lyon, GeNeuro Innovation SAS, and the European Investment Bank (“EIB”) announce the signature of a loan for a total amount of EUR25 million.
  • The first tranche of EUR 7million, available immediately, is intended to support the Phase 2 clinical trial in long-COVID. The other tranches of EUR10 million and EUR8 million are intended for the preparation and launch of Phase 3 respectively.
  • Extension of GeNeuro’s cash visibility to 3Q2024, including the first tranche of EUR 7 million.
  • The EIB financing, backed by the European union’s new InvestEU long-term investment programme, underlines the EIB’s commitment to tackle long-COVID, a major public health problem worldwide affecting millions of people.

GeNeuro, a biopharmaceutical company developing novel treatments for neurodegenerative and autoimmune diseases such as multiple sclerosis (MS), amyotrophic lateral sclerosis (ALS) and the severe consequences of COVID-19, (PASC, post-COVID or Long-COVID), announced the signature of a credit agreement for a total amount of up to EUR 25 million with the European Investment Bank (“EIB”), supported by the InvestEU programme.

Jesus Martin Garcia, CEO of GeNeuro, said: We thank the EIB for this support to GeNeuro’s personalized medicine approach against neuropsychiatric syndromes that affect millions of patients who have had COVID. This support demonstrates the authorities’ growing concern about this serious public health problem. The first EUR 7 million of this funding contributes to the development of the Phase 2 clinical study in Long-COVID, the first results of which should be available by the end of this year.”

Ambroise Fayolle, vice-president of the European investment bank, added: “After having supported the prophylactic vaccines and treatments for acute cases, EIB, through the financing of GeNeuro, will foster the development of therapeutics for Long-COVID. GeNeuro is one of the very first biotechs beneficiaries of the European Union’s new InvestEU programme, which provides the EIB with additional resources. This transaction complements the cycle of COVID-19 related syndromes tackled by innovative European biotech companies that benefited from EIB support through its venture debt programme”.

As a reminder, GeNeuro launched a Phase 2 trial at the end of 2022 that is evaluating the clinical efficacy of a six-month treatment with temelimab, the anti-W-ENV antibody developed by GeNeuro, on the improvement of cognitive impairment and/or fatigue in long-COVID patients who are positive for the presence of W-ENV protein in their blood. The W-ENV protein was observed in more than 25% of patients with persistent syndromes after having had COVID. This personalized medicine approach could, if the current clinical trial is successful, offer a therapeutic solution to millions of patients affected by long-COVID.

See related article: Global Environmental Consulting Services Market Report 2022-2026: COVID-19 Expedites Decarbonization Efforts

Principal terms and conditions of the credit agreement

The 25 million EUR credit facility is divided into three tranches: 7 million EUR for the first tranche (“Tranche A”), 10 million EUR for the second tranche (“Tranche B”) and 8 million EUR for the third tranche (“Tranche C”). The disbursement of each of the tranches, including the first disbursement of Tranche A, is subject to certain conditions, the main ones of which are detailed below:

Tranche A:

  • Issue of warrants with the EIB relating to Tranche A.

Tranche B:

  • Full run of Tranche A,
  • Issue of the warrants relating to Tranche B,
  • Positive results from the Phase 2b clinical trial in long-COVID,
  • Reaching 30 million EUR in cash, in the form of equity, license revenues or customer advances.

Tranche C:

  • Full run of Tranche B,
  • Issue of the warrants relating to Tranche C,
  • Production contracts with two companies specialized in Contract Manufacturing
  • Enrollment of the first patient in a Phase III clinical trial in long-COVID, or conditional marketing authorization of temelimab in this indication granted by Swissmedic, the EMA or the FDA,
  • Generating 30 million EUR (in addition to the above-mentioned 30 million EUR) in the form of equity, licensing revenues or customer advances.

The three tranches will be available for 36 months from the signing of the Financing Agreement.

Interest rate: The credit agreement will have a fixed annual interest rate of 2% for each tranche as well as a declining capitalized interest rate per tranche, 7% for Tranche A, 5% for Tranche B and 2.5% for Tranche C, with a maturity of five years for each tranche. This interest will be capitalized annually, payable at maturity and incorporated in the nominal amount of the loan, and will therefore bear interest.

In certain circumstances, the credit may be prepaid, in whole or in part, at a fee, at the request of the Company or EIB following certain prepayment events, including a change of control or change of management of the Company.

Subject to certain conditions, upon the occurrence of standard events of default (e.g., payment default, misrepresentation, cross default), the EIB may require the Company to immediately repay all or part of the outstanding loan and/or cancel any undisbursed portion.


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