We have concluded a venture debt agreement with the European Investment Bank for €15 million (approximately ¥2 billion).

Strengthening Financial Foundation for Implementation of Large-scale Verification Trials

Innovacell A.G., a 100% subsidiary of Innovacell K.K. (headquartered in Shibuya, Tokyo, CEO: Jason David Sieger), focused on cell therapies for the treatment of fecal and urinary incontinence to enhance people’s health and quality of life, has secured a credit line of €15 million from the European Investment Bank (EIB) through venture debt as of March 24.

Contract Background

The venture debt agreement was established after approximately one year of due diligence and negotiations. This funding will be crucial for advancing the upcoming Phase III international joint clinical trial (fidelia trial) of the cell therapy product (ICEF15) targeting fecal incontinence. Although this credit line from the EIB is allocated to our subsidiary, Innovacell A.G., the funds will also be utilized for clinical trial costs in Japan as needed.

The EIB’s venture debt program is guaranteed by the European Guarantee Fund (EGF), which was established by 22 EU member states to mitigate the economic impact of the pandemic on small and medium-sized enterprises.

Comment from Jason Sieger, CEO of Innovacell K.K.

“The fields of fecal incontinence and urinary incontinence receive relatively little research funding globally, and there is an ongoing demand for innovative treatment options from both physicians and patients. The decision by the EIB to provide funding to our group reflects not only the expectation for the advanced therapeutic technologies we are passionately developing, but also a resonance with the belief that offering new treatments in this area is beneficial for society.

Currently, we are making steady progress with our Series C funding (equity financing) to prepare for our listing on the Tokyo Stock Exchange Growth Market and to accelerate the development of our pipeline products. However, the outlook for both domestic and international economies is becoming increasingly uncertain due to factors such as rising global inflation, interest rate hikes by the U.S. Federal Reserve, and Russia’s invasion of Ukraine. In this context, securing the credit line from the EIB, in addition to our Series C funding, is expected to significantly contribute to the advancement of our business.

Comment from Thomas Östros, Vice President of the European Investment Bank

“We recognize the high level of innovation in Innovacell’s research and development efforts. Innovacell is targeting disease areas with unmet medical needs, which many patients are eagerly awaiting solutions for. If regenerative medicine like this becomes a reality, it can help maintain and advance Europe’s scientific leadership, significantly contributing to enhanced global competitiveness.”

Comment from Ekkehart Steinhuber, CEO of Innovacell A.G.

“As people age, or due to injuries and diseases, cells, tissues, and organs may not function optimally. Regenerative medicine has the potential to restore these conditions. It works by replacing and reinforcing affected areas with new cells or tissues, thereby activating the body’s inherent repair and regeneration processes. Unlike palliative care, the aim of regenerative medicine is to remove the root causes of diseases and restore function, providing a curative approach.

About the European Investment Bank (EIB)

The European Investment Bank (EIB) is the long-term lending institution of the European Union (EU), owned by its member states. Innovation is one of the key policy objectives of the EU, and the EIB provides long-term funding for sound investments by companies contributing to this goal.

Additionally, the European Guarantee Fund (EGF) was established by the EIB Group, with contributions from Germany and other EU member states, to support businesses suffering from the COVID-19 crisis. Utilizing approximately €25 billion in guarantees from the EGF, the EIB and the European Investment Fund (EIF) can quickly provide loans, guarantees, asset-backed securities, equity, and other financial products primarily to small and medium-sized enterprises (SMEs). The EGF is part of the EU’s economic recovery measures, aimed at providing a total of €540 billion to strengthen the areas most severely affected by the economic downturn.