Filing Details

Broadfin Capital, LLC

300 Park Avenue, 25^th Floor

New York, New York 10022

Telephone- (212) 808-2460

(Name, Address and Telephone Number of Person Authorized to Receive

Notices and Communications)

1,948,554*

This Schedule 13D is being filed jointly by (i) Broadfin Capital, LLC, a Delaware limited liability company, (ii) Broadfin Healthcare Master Fund, Ltd., an exempted company incorporated and existing under the laws of the Cayman Islands, and (iii) Kevin Kotler, a United States citizen (collectively, the “Reporting Persons”).

The principal business address of the Reporting Persons is 300 Park Avenue, 25^th Floor, New York, New York 10022.

Kevin Kotler is the managing member of Broadfin Capital, LLC, an investment management firm that serves as the investment manager to Broadfin Healthcare Master Fund, Ltd.  The principal business of Broadfin Healthcare Master Fund, Ltd. is purchasing, holding and selling securities for investment purposes.

The funds for the purchase of the Shares beneficially owned by the Reporting Persons came from the working capital of Broadfin Healthcare Master Fund, Ltd.

No borrowed funds were used to purchase the Shares, other than any borrowed funds used for working capital purposes (including certain leverage arrangements) in the ordinary course of business.

On March 15, 2018, Aegerion Pharmaceuticals, Inc. (“Aegerion”), a wholly-owned subsidiary of the Issuer, entered into a loan and security agreement (the “Loan Agreement”) with Broadfin Healthcare Master Fund, Ltd. and certain other parties (the Broadfin Master Fund together with such other parties are referred to herein as the “Lenders”), pursuant to which the Lenders have made a term loan (the “Loan”) to Aegerion in an aggregate amount of $20 million, $10 million of which was loaned by the Broadfin Master Fund.

The Loan will accrue interest at the rate of 9% per annum. Following an event of default and so long as an event of default is continuing, the interest rate would increase by 3% per annum. Interest will accrue and compound quarterly in arrears and is not be payable in cash until the Loan Maturity Date (as defined below) or any earlier time that interest and principal become due and payable under the Loan. The Loan may be prepaid, in whole or in part, by Aegerion at any time without premium or penalty.

The Loan matures on the earliest of (i) August 1, 2019, (ii) thirty (30) days prior to the maturity date of Aegerion’s 2.0% convertible senior notes due August 15, 2019 (the “Convertible Notes”), (iii) the date that any restructuring or recapitalization of all or substantially all of the Convertible Notes, including any exchange offer or similar transaction (a “Note Restructuring Transaction”), is substantially consummated and (iv) upon acceleration of the obligations under the Loan Agreement (such earliest date, the “Loan Maturity Date”).

Aegerion’s obligations under the Loan Agreement are secured by substantially all of the assets of Aegerion, subject to certain contractual limitations (if any) and other exclusions set forth in the Loan Agreement and related documentation. The liens on the assets of Aegerion granted to secure the Loan are subordinate to the liens granted in favor of the Issuer to secure Aegerion’s obligations to the Issuer pursuant to the Amended and Restated Senior Loan Agreement (the “Senior Loan Agreement”), dated as of March 15, 2018, between Aegerion and the Issuer. Pursuant to terms of the subordination agreement (the “Subordination Agreement”) entered into on March 15, 2018, by the Issuer, Aegerion and the Lenders, the Loan is subordinate to approximately $40 million of obligations of Aegerion to the Issuer under the Senior Loan Agreement.

The Loan Agreement includes affirmative and negative covenants, including prohibitions on the incurrence by Aegerion and its subsidiaries of any additional indebtedness (other than trade debt in the ordinary course, the debt under the Senior Loan Agreement (including up to an additional $20 million of additional debt thereunder to the extent such additional debt is subordinated to the Loan), the sale, transfer or exclusive license of (other than in the ordinary course), or the granting of liens on, certain assets. In addition, the Loan Agreement includes customary events of default for a transaction of this type, and includes a cross-default to the occurrence of any event of default under the Senior Loan Agreement or under the Convertible Notes. Certain Myalept “spin-out” transactions would also be permitted under the Loan Agreement.

As consideration for the Loan, Broadfin Master Fund was issued a warrant to purchase an aggregate of 909,296 Shares (the “Warrants”). The Warrants have an exercise price equal to $4.40 per share, representing the volume weighted average price of the Shares for the 20 trading days ending on March 14, 2018, and a term of four years. Pursuant to the terms of the Warrants, the Issuer has agreed that, subject to certain limitations, upon the request of any Lender, the Issuer will file a registration statement covering any or all of the Shares issuable to such Lender upon exercise of the Warrants, which registration statement would provide for the resale of such Shares.

The foregoing summaries of the Loan Agreement, the Warrants and the Subordination Agreement are subject to, and qualified in their entirety by reference to, the Loan Agreement, the Form of Warrant and the Subordination Agreement, which are referred to as Exhibits 2, 3 and 4, respectively in Item 7 below, and incorporated herein by reference.

The Warrants are subject to a limitation in the Warrant instruments on the exercise of the Warrants to the extent that such exercise would cause the Reporting Persons to beneficially own more than 9.99% of the Issuer's Common Shares.

As of the date hereof, Broadfin Capital, LLC, Broadfin Healthcare Master Fund, Ltd. and Kevin Kotler may be deemed to be the beneficial owner of 1,948,554 Common Shares or 10.42% of the shares of the Common Shares of the Issuer, based upon the 18,703,204 shares of Common Shares outstanding as of March 12, 2018, according to the Form 10-K filed by the Issuer on March 16, 2018.

Each of Broadfin Capital, LLC, Broadfin Healthcare Master Fund, Ltd. and Kevin Kotler has the sole power to vote or direct the vote of 0 shares of Common Shares and the shared power to vote or direct the vote of 1,948,554 shares of Common Shares.

Each of Broadfin Capital, LLC, Broadfin Healthcare Master Fund and Kevin Kotler has the sole power to dispose or direct the disposition of 0 shares of Common Shares and the shared power to dispose or direct the disposition of 1,948,554 shares of Common Shares.

Other than the Loan Agreement and the issuance of the warrants described in Item 4, there have been no transactions in the Issuer in the last 60 Days.

The Reporting Persons specifically disclaim beneficial ownership in the shares of Common Stock reported herein except to the extent of their pecuniary interest therein.

Please see Item 4.

Additionally, pursuant to the Warrant Certificate, dated November 29, 2016 (the "Warrant Certificate"), by an between the Issuer and certain of the Reporting Persons, and the Unit Subscription Agreement, dated June 14, 2016 (the "Unit Subscription Agreement") by and among the Issuer, certain of the Reporting Persons and the Investors (as defined in the Unit Subscription Agreement), as amended as applied to such Reporting Persons on September 9, 2016, whereby such Reporting Persons may acquire up to 568,181 Common Shares of the Issuer by exercising fully paid-up warrants (the "Warrants"), provided that the Reporting Persons may not exercise the Warrants where the Reporting Persons would own in excess of the Beneficial Ownership Limitation (as defined in the Warrant Certificate) after such exercise. The Reporting Persons may increase or decrease the Beneficial Ownership Limitation upon 61 days' notice to the Issuer. 

An agreement relating to the filing of a joint statement as required by Rule 13d-1(f) under the Securities Exchange Act of 1934 is filed herewith as Exhibit A.

Loan Agreement, filed as Exhibit 10.1 to Novelion Therapeutics Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on March 15, 2018 and is hereby incorporated by reference.

Form of Warrant, filed as Exhibit C to Exhibit 10.1 to Novelion Therapeutics Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on March 15, 2018 and is hereby incorporated by reference.

Subordination Agreement, filed as Exhibit 10.3 to Novelion Therapeutics Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on March 15, 2018 and is hereby incorporated by reference.