Daily News: April 4, 2014

Capital Royalty Provides $45MM Term Loan to NanoString Tech

NanoString Technologies, a provider of life science tools for translational research and molecular diagnostic products, announced that it has entered into a term loan agreement with Capital Royalty and certain of its affiliates. The agreement provides NanoString with up to $45 million of available borrowing capacity.

“This transaction is another example of our strategy to partner with commercial stage life sciences businesses having high growth potential,” said Charles Tate, chairman of Capital Royalty. “We are particularly excited by NanoString’s opportunity to expand beyond its thriving research based business into diagnostics, initially with the ProsignaTM breast cancer assay.”

Under the terms of the agreement, Capital Royalty will initially provide $30 million, of which $20 million will be borrowed up front to retire the company’s existing loans with Oxford Finance and Silicon Valley Bank, and $10 million will be borrowed within six months.

Up to $15 million of additional funding will be available to the company, at its option, through May 2015, subject to the satisfaction of a revenue milestone and certain other borrowing conditions. The agreement has a term of six years, with quarterly payments of interest only for the first five years. At the company’s option, during the first four years a portion of the interest payments can be deferred and paid together with the principal in the sixth year.

Armentum Partners acted as financial advisor to NanoString for the debt transaction.

Capital Royalty is focused on intellectual property investments in approved products through structures including royalty bonds, secured debt, revenue interests and traditional royalty monetizations.