We are advising Centogene on its joint venture with and convertible debt investment by Lifera

Davis Polk is advising Centogene N.V., a life science company focused on data-driven answers in rare and neurodegenerative diseases, on its strategic collaboration with the Pharmaceutical Investment Company (Lifera), a biopharmaceutical company wholly owned by the Public Investment Fund (PIF) of Saudi Arabia. The parties have agreed to form a joint venture company in Saudi Arabia (the “JV”) and Centogene, the current market leader in outsourced genetic testing for patients in Saudi Arabia, will provide its diagnostics and multiomics expertise to the JV and assist with the establishment of an advanced laboratory and bioinformatics infrastructure. In connection with the joint venture, Centogene will receive a $30 million mandatory convertible loan from Lifera, as well as significant JV performance-related milestone payments and revenue-based royalties until the year 2033.

Formation of the JV (and funding by Lifera of the convertible loan) is expected to be completed in the second half of 2023, subject to, among other things, foreign direct investment and other regulatory clearances, no material adverse change having occurred with respect to Centogene and agreement by the parties on the terms of the commercial agreements relating to the JV.

In connection with the entry into the joint venture, Centogene’s existing lender Oxford Finance has agreed to make substantial amendments to Centogene’s existing financing documentation, to become effective concurrently with the funding by Lifera of the new convertible loan.

Headquartered in Rostock, Germany, Centogene’s mission is to provide data-driven, life-changing answers to patients, physicians and pharma companies for rare and eurodegenerative diseases. Centogene integrates multiomic technologies with the Centogene Biodatabank, providing dimensional analysis to guide the next generation of precision medicine. Centogene’s approach enables rapid and reliable diagnosis for patients, supports a more precise physician understanding of disease states and accelerates and de-risks targeted pharma drug discovery, development and commercialization.

Lifera is a new biopharmaceutical company dedicated to advancing Saudi Arabia’s biopharmaceutical sector and building national health resilience. By developing local manufacturing capacity for vaccines, insulin, plasma therapeutics and other biologics, as well as investing in genetic testing and precision medicine, Lifera aims to ensure people in Saudi Arabia have access to reliable and affordable medicines. Lifera plans to do this through partnerships and investments with leading international and Saudi companies to transfer global expertise and technology to Saudi Arabia.

The Davis Polk corporate team includes partner Leo Borchardt, counsel Alexander W. Simmonds and associate Gianna Ceophas. The finance team includes partner David Hahn, counsel Darren Mahone and associate Sam Dilthey. The intellectual property, technology and commercial transactions team includes partner David R. Bauer, counsel Samantha Lefland and associate Brette L. Trost. Partner Derek Walters is providing derivatives advice. Members of the Davis Polk team are based in the London and New York offices.