Synergy Pharmaceuticals closed on a $300 million debt financing structured as senior secured loans from CRG, a healthcare-focused investment firm, and its lender syndicate.
The first tranche of $100 million was funded upon execution of the loan documents. The loan agreement provides for future borrowings, subject to the satisfaction of certain financial and revenue milestones and other borrowing conditions as follows:
- An additional $100 million on or before February 28, 2018
- Up to two additional tranches of up to $50 million each on or before March 29, 2019
The loans mature on June 30, 2025. The loans carry an annual interest rate of 9.50%. The company maintains the option to prepay outstanding loan amounts during the term of the loan.
“This non-dilutive financing enhances our cash position and provides us with financial flexibility to continue to execute on the launch of TRULANCE and achieve our business objectives, which we are confident will ultimately maximize long-term shareholder value,” said Gary Gemignani, EVP and chief financial officer of Synergy. “The structure of this financing provides us with access to capital for support of our commercialization of TRULANCE and funds our current plans for the company through 2019 when, based on our current assumptions, we expect to be cash flow breakeven.”
Synergy is a biopharmaceutical company focused on the development and commercialization of novel GI therapies.