Recro Pharma, a specialty pharmaceutical company focused on therapeutics for hospitals and other acute care settings, secured a $100 million credit facility from funds managed by Athyrium Capital Management, a healthcare-focused investment firm.

Proceeds from the facility will be used to refinance Recro’s outstanding debt, pay a $45 million milestone due to intravenous meloxicam licensor Alkermes upon the approval of IV meloxicam 30mg by the FDA, and help fund working capital. Piper Jaffray acted as exclusive financial advisor and sole placement agent to Recro on the transaction.

The facility will be a five-year, interest only term loan bearing interest at a rate of LIBOR + 9.75% per annum. This structure will allow for more flexibility at a significantly lower cost of capital relative to the company’s prior debt. The funds will be structured in three tranches, with $60 million available immediately upon closing of the transaction. An additional $20 million will be available upon the FDA’s approval of meloxicam, subject to certain financial conditions. The final $20 million will be available after Recro demonstrates early meloxicam commercial traction.

In connection with the credit facility, Recro issued and granted to Athyrium warrants to purchase 348,664 shares of Recro common stock at an exercise price of $8.60 per share.

Richard Pines, partner at Athyrium, said, “The combination of Recro’s stable, cash flow generating CDMO business and upside potential from its non-opioid, acute care pain franchise creates an attractive investment profile for Athyrium. With a strong safety and efficacy profile, based on our due diligence, we believe meloxicam can be a valuable component of multi-modal pain management in the post-surgical setting. We look forward to partnering with Recro during this transformative time in the company’s life.”