Strongbridge Biopharma entered into a $50 million senior credit facility with CRG, a healthcare-focused investment firm, to retire its existing debt facility and provide additional capital for the company.

Strongbridge initially borrowed $40 million under the term loan agreement and has the option to borrow an additional $10 million based upon the achievement of certain revenue milestones on or prior to June 30, 2018. Concurrent with this first tranche, CRG purchased $3 million of the company’s ordinary shares at a price of $6.98 per share.

“Strongbridge is in a unique position to address major areas of unmet need in rare disease,” said Luke Düster, managing director at CRG. “CRG looks forward to working with Strongbridge as they continue to build their global business and advance their product pipeline. Our due diligence has confirmed our belief that Strongbridge’s portfolio has great potential and that access to funds from this financing will help build value for the company.”

The term loan agreement has a six-year term with three years of interest-only payments. The interest-only period may be extended to six years based upon the achievement of certain milestones during the first three years of the loan term. As a condition to the new credit facility, the Company issued warrants with a seven-year term to CRG to purchase 394,289 of the company’s ordinary shares at an exercise price of $7.37 per share. After the retirement of existing debt and payment of expenses associated with the financing, Strongbridge intends to use the remainder of the upfront proceeds from the credit facility and equity investment for general corporate purposes and working capital.

Armentum Partners served as financial advisor to Strongbridge for this transaction.

Dublin-based Strongbridge Biopharma is a global commercial-stage biopharmaceutical company focused on the development and commercialization of therapies for rare diseases with significant unmet needs.