The transaction also will result in the creation of a new entity that will focus on cortical stimulation through Orion. Second Sight is developing that product, which bypasses the diseased eye and could provide a new form of vision.
“Our planned business combination with Second Sight will bring exciting opportunities for both companies, given our synergistic business models and complementary presence in Europe and the U.S.,” said Lloyd Diamond, CEO of Pixium Vision, which is listed on Euronext Growth in Paris.
Under a memorandum of understanding between the parties, Pixium Vision will provide Second Sight with all its assets and liabilities in relation to its neuromodulation technology used in the treatment of blindness in exchange for 34,876,043 newly issued shares of Second Sight common stock, representing about 60% of the fully diluted outstanding stock. In addition, about $25 million will be raised in a private placement at the level of the new combined company.
Paris-based Pixium Vision will become a holding company and have 60% of the newly combined entity. Following that combination, the Orion asset will be spun out, with the new combined entity holding 40% prior to any financing.
The complementary technologies of the duo have the potential to treat many forms of blindness, including degenerative retinal diseases, in addition to glaucoma, optic nerve disease and trauma. The expanded size of the combination is expected to allow for easier access to capital.
During a presentation on the tie-up, Diamond emphasized that the combined entity would continue to trade on Nasdaq. “And the financing use of proceeds will fund the combined group's ongoing business for any future additional capital raise that we together undertake,” he added.
Diamond noted that Pixium Vision is focused on a sole product, the Prima system to partially replace the normal physiological function of the eye’s photoreceptor cells by electrically stimulating the nerve cells of the inner retina.
Pixium plans to transfer its asset into a combination that Second Sight will support through a so-called permanent establishment. “And those assets of Pixium, the employee base, the know-how will reside here in Paris as a permanent establishment of Second Sight.”
Last March, Second Sight, the Sylmar, Calif.-based developer of the Argus II for those with late-stage retinitis pigmentosa, said it was winding down operations, citing the pandemic and the impact it will have on the company’s ability to secure financing. The following month, it said it had taken steps to reduce overhead and conserve liquidity as it continues operations while assessing strategic options. By early May, it reported the close of a public offering of 7.5 million shares of common stock at an offering price of $1 per share.
Meanwhile, Pixium will have the opportunity to move forward with the Prima system, which is in a pivotal study and have funding in place through the end of 2021. “This transaction, including closing of the proposed financing, should provide us with sufficient resources to extend our cash runway beyond 2022, covering results from PRIMAvera.” said Diamond.
During a Q&A session, the company addressed several topics, including whether there is a commitment for the $25 million fund raise. Guillaume Renondin, CFO of Pixium Vision, said not at this point, but it has engaged a U.S. bank to help in finding the funds.
That was followed up with whether the funds would be raised simultaneously with the Nasdaq listing or before. Renondin said the group wanted to obtain the commitment prior to the listing.
In terms of the $25 million raise, Renondin acknowledged that it would go primarily toward the development of Prima. “Orion will have its own financing.”
There was a follow-up on how the Orion-focused company would be traded. Matt Pfeffer, Second Sight’s acting CEO, said the spinoff’s name has yet to be decided. It initially will be a public company, but he noted that it is uncertain if that will be permanent. “[M]any of you know that the Orion technology has largely been funded by a small group of private individuals and that may likely continue, and we may – the funding could come from various sources.”