Daily News: March 7, 2019

Athyrium Agents $25MM Upsize to Recro Pharma Facility


Funds managed by Athyrium Capital Management served as administrative agent on a $125 million expanded credit facility for Recro Pharma, a specialty pharmaceutical company focused on therapeutics for hospitals and other acute care settings

The increased financial flexibility created by this non-dilutive funding will be used to strengthen the company’s balance sheet and support its plans to commercialize its lead drug candidate, intravenous meloxicam, which is currently under review by the U.S. Food and Drug Administration.

The prior $100 million credit facility, under which Recro had drawn $70 million, required various conditions to draw the remaining $30 million of available capital. The amendment substantially increased and fully funded the capital under the expanded $125 million credit facility, providing immediately available net proceeds of $40.5 million upon closing.

Among other items, the amendment reset the fee structure in a non-dilutive manner with no warrants or equity being issued and extended the maturity date to March 31, 2023, while maintaining an interest rate of LIBOR plus 9.75% per annum.

“Following a debt process evaluating non-dilutive financing options, Athyrium was selected for a credit refinancing transaction,” said Gerri Henwood, president and CEO of Recro Pharma. “We are happy to have the continued support and confidence of Athyrium, a premier partner known for its strategic investments in promising healthcare companies and assets. The increased commitment from Athyrium prior to the upcoming PDUFA goal date of March 24, 2019 provides important non-dilutive capital and additional financial flexibility as we anticipate becoming a commercial-stage enterprise and prepare for the potential launch of IV meloxicam.”

Jeffrey Ferrell, managing partner at Athyrium, stated, “We are pleased with the stability and growth of the CDMO business since our original commitment. Recro has matured its business development efforts and continued to build and strengthen its customer relationships, as recently evidenced by the new exclusive five-year manufacturing and supply agreement with Novartis Pharma AG. Recro management continues to execute on various strategic initiatives and we look forward to continuing our strong partnership with Recro as they build their non-opioid acute care franchise.”

JMP Securities acted as exclusive financial advisor and sole placement agent to Recro on this transaction.

Athyrium is a specialized asset management company formed in 2008 to focus on investment opportunities in the global healthcare sector. Athyrium advises funds with over $3.7 billion in committed capital.