On August 10, 2020 AVEO Oncology (Nasdaq: AVEO) reported the closing of a tranched, $35 million debt facility with Hercules Capital, Inc. (NYSE: HTGC) and its affiliates (Press release, AVEO, AUG 10, 2020, View Source [SID1234563364]). The new facility has a maturity of 36 months, extendable up to 48 months, and an interest-only period of 12 months, extendable up to 30 months upon the achievement of performance milestones related to the approval and commercialization of tivozanib.
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Under the terms of the agreement, the initial tranche of $15 million fully refinanced AVEO’s existing Hercules term loan facility, which had an outstanding principal amount of approximately $9.7 million, providing net new proceeds of $5.3 million. A second $10 million tranche is contingent upon the approval of the tivozanib New Drug Application (NDA) by the U.S. Food and Drug Administration (FDA) as a treatment for renal cell carcinoma (RCC), and certain other terms and conditions. An additional two $5 million tranches will become available after that time – one if product revenues from net sales of tivozanib reach $20.0 million within a specified time frame, and the other at the lender’s consent. As previously announced, the FDA has assigned AVEO’s NDA a Prescription Drug User Fee Act target action date of March 31, 2021.
"The refinancing of our debt facility with Hercules Capital is expected to provide us with access to capital that funds planned operations well into the anticipated launch of tivozanib," said Michael Bailey, president and chief executive officer of AVEO. "We continue to work closely with the FDA in their review of our NDA, as we build out our commercial organization, explore potentially pivotal immunotherapy-combination studies for tivozanib, and advance our pipeline."
"We are excited and pleased to be extending and expanding our financing partnership with AVEO as they prepare for the potential approval and launch of tivozanib. Our relationship with AVEO spans nearly 15 years and this most recent financing is another example of our ability to support innovative life sciences companies at all stages of development and through multiple value inflection points," said Bryan Jadot, Senior Managing Director and Life Sciences Group Head for Hercules.