On April 18, 2023 BioCryst Pharmaceuticals, Inc. (Nasdaq: BCRX) reported that the company has secured $450 million in committed financing from funds managed by Pharmakon Advisors, LP (Press release, BioCryst Pharmaceuticals, APR 18, 2023, View Source [SID1234630232]). BioCryst has elected to draw $300 million of the $450 million available to the company on the closing date. The remaining $150 million of committed capital can be drawn at the company’s option until September 2024.
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Net proceeds to the company at closing will be approximately $26 million following the repayment of its existing credit facility with Athyrium Capital Management, and fees and expenses associated with the transaction.
The new five-year credit facility bears interest at the 3-month Secured Overnight Financing Rate (SOFR) + 7.00% (subject to a 1.75% floor). BioCryst has the option to pay up to 50% of the interest on the loans advanced on the closing date in-kind for the first six quarters of the term (subject to an increase in margin from 7.00% to 7.25%), allowing the company to defer cash interest payments until after this period. The facility contains no scheduled amortization payments, with all outstanding principal due at the maturity date in 2028. There are no financial covenants associated with the financing.
"This new credit agreement with Pharmakon enhances BioCryst’s already strong financial position by extending our repayment bullet from 2025 to 2028, when we expect our growing ORLADEYO revenues will be much closer to our peak of $1 billion. On the basis of our strong launch execution and future expectations for ORLADEYO, we have been able to secure more favorable financial terms than we had in our initial pre-launch credit agreement, have the flexibility to draw an additional $150 million of non-dilutive capital completely at our option, and have dramatically reduced our dependence on the capital markets," said Anthony Doyle, chief financial officer of BioCryst.
"The BioCryst team is driving extraordinary success with ORLADEYO, and we are excited to support the company and management team as they continue growing to profitability and bring more rare disease medicines to patients," said Pedro Gonzalez de Cosio, chief executive officer of Pharmakon Advisors, LP.
Pharmakon Advisors, LP is a leading investor in non-dilutive debt for the life sciences industry and is the investment manager of the BioPharma Credit funds. Established in 2009, funds managed by Pharmakon Advisors have committed $7.2 billion across 49 investments.
TD Cowen acted as exclusive financial advisor to BioCryst on the transaction. Gibson Dunn acted as legal advisor to BioCryst. Akin Gump acted as legal advisor to Pharmakon Advisors.