2020 Annual Meeting
SWK Holdings Corporation’s 2020 Annual Meeting of Stockholders to be held in a virtual meeting format only via the Internet. You will not be able to attend the Annual Meeting in person. The Annual Meeting will be held on Monday, May 18, 2020 at 9:00 a.m. central time. You can attend the Annual Meeting at the URL below. You will be required to provide the Control Number from your Proxy Card and the Password listed below in order to join the Annual Meeting as a stockholder and vote during the meeting. Otherwise, you are welcome to join the meeting as a Guest.
Meeting Website: www.meetingcenter.io/235495017
The matters expected to be acted upon at our 2020 Annual Meeting of Stockholders are the election of six (6) directors, the ratification of the appointment of BPM LLP as our independent auditors for the fiscal year ending December 31, 2020, and the approval on an advisory basis of the compensation paid to certain officers.
The materials for the annual meeting can be found at the following links:
Dear Fellow Stakeholders:
Following a productive 2019 fiscal year, we entered 2020 seeking to generate near-term and longer-range returns to the stockholders of SWK by capitalizing on our unique position as a leader in the specialty healthcare finance industry focused on commercial-stage, small to mid-sized life science companies and royalty owners. The strategy, which we continue to execute, is focused on expanding our traditional specialty healthcare finance business through synergistic transactions that offer both attractive valuations and upside optionality capable of driving returns for our stockholders. Our transformational acquisition of Enteris BioPharma, Inc. (“Enteris”) is evidence of this plan in action.
Dovetailing our initiatives to enhance SWK’s business, our common stock is now traded on the NASDAQ Capital Market. In order to enable us to achieve that goal, we enhanced our Board of Directors to comply with the listing requirements and infuse the team with expertise that aligns with our growth strategy.
Through it all, SWK remains laser focused on securing transactions that leverage our well-established reputation as a trusted financing partner for small to mid-sized life sciences companies looking for capital to support their growth opportunities. This is our core business, and we expect it to remain the primary growth driver for SWK.
I would like to take this opportunity to highlight some of our accomplishments and how these events feed into our future plans. All of this was made possible by the diligent efforts of our lean SWK team. We would like to thank our employees for their dedication and loyalty and our stakeholders for their continued support as we evolve our model and grow SWK.
A Productive 2019 Fiscal Year
In 2019, SWK closed five new transactions and had three successful repayments. SWK also raised a credit facility to support growth efforts and initiated a stock buyback program, which was resumed earlier this year. SWK anticipates continued strength into 2020 and beyond. Given our reputation as a trusted financing partner for life science companies seeking unique financing structures to support growth, our opportunity pipeline remains very active. Since launching in 2012, SWK has successfully executed this business model with 36 partners, deployed $539 million of capital and created a portfolio of royalties and structured credit backed by royalties that totals approximately $180 million across 23 partners. That said, SWK seeks to continue to improve the quality of our portfolio and our management with disciplined underwriting.
Fiscal 2019 Acquisition
On August 26, 2019, SWK announced a strategic acquisition whereby SWK acquired Enteris from a private equity firm. Enteris is a biotechnology company offering innovative formulation solutions utilizing its proprietary oral drug delivery technology, Peptelligence®. Enteris will operate as a wholly-owned subsidiary of SWK.
Under the terms of the deal, SWK paid $21.5 million to the seller. Further, Enteris and the seller will share the milestone and royalty proceeds of the Non-Exclusive License Agreement between Enteris and Cara Therapeutics, Inc. (“Cara”) executed on August 20, 2019 under which Enteris licensed its proprietary Peptelligence® oral drug formulation to Cara for use with its Oral KORSUVA™ drug development candidate per the following conditions:
- Seller received 100 percent of the $8 million upfront amount paid upon execution of the Cara license;
- Seller will receive 40 percent of the first milestone payment, with Enteris to receive 60 percent of such payment;
- Seller will receive 75 percent of any remaining milestone and royalty payments until Seller receives an aggregate $32.75 million, excluding the first milestone payment, with Enteris entitled to the remaining 25 percent; and
- All proceeds thereafter will be split evenly between Enteris and Seller.
SWK made some key changes to its Board of Directors during fiscal year 2019. On August 30, 2019, the board expanded to include six members, and upon the recommendation of the Governance and Nominating Committee, appointed both Winston L. Black, III, Chief Executive Officer of SWK, and Aaron G.L. Fletcher, Ph.D., to the newly created board seats. The board also appointed Dr. Fletcher to its Audit Committee. Subsequently, at our 2019 annual meeting, all of our directors were re-elected to serve until the 2020 annual meeting.
Uplisting to NASDAQ Capital Market
On January 21, 2020, SWK Holdings announced that its shares of common stock were approved for listing on the Nasdaq Capital Market. Trading on the exchange commenced on January 23, 2020 under the ticker symbol "SWKH."
Impact of the Coronavirus Pandemic
Coronavirus or COVID-19 is an unprecedented global health crisis, impacting all aspects of society and business. SWK, like all businesses, is not immune, and we are actively taking measures to mitigate the impact of the situation as much as possible, day by day. Unquestionably, COVID-19 is having a far-reaching effect on the broader life science sector, and we are vigilantly monitoring the situation and, in particular, the potential impact on our portfolio companies, their liquidity and contingency plans. Since the outbreak began, we have been in regular contact with the individual management teams across the portfolio, initially focused on supply chain disruptions, and more recently, focused on business visibility. While we do expect our partner companies to experience sudden choppiness in business trends, we believe much of this will be demand deferral vs. demand destruction, with many of these businesses poised to rebound as hospitals and doctors’ offices re-open to address patient needs. We believe this is due to SWK’s focus on investing in small and mid-sized life sciences companies with strong intellectual property protecting commercial products that fill important demands within the healthcare system.
Given this, we are prepared to prudently support our partner companies during this unprecedented time of stress, and importantly, remain actively identifying opportunities to put our capital to work. Specifically thinking about offense, the unprecedented dislocation broadly brought on by COVID-19 should undoubtedly create compelling investment opportunities as many small to mid-sized healthcare companies with otherwise strong product offerings will be in the need of capital. This is ideally suited our business model.
The past 12 months have been transformative for SWK, marked not only by the robust performance of our specialty finance business and the August 2019 acquisition of Enteris, but also the recent uplisting of our stock to the Nasdaq Capital Market. These accomplishments underscore a broader growth strategy being implemented by SWK intended to build value for our shareholders and enhance our position as the go-to specialty financing firm for small and mid-sized commercial-stage life sciences companies.
Winston L. Black III
Chief Executive Officer