Phathom Pharmaceuticals, a late clinical-stage biopharmaceutical company focused on developing and commercializing novel treatments for gastrointestinal diseases, obtained a $200 million term loan facility from Hercules Capital, a provider of customized debt financing for companies in life sciences and technology-related markets. This additional capital further strengthens Phathom’s balance sheet in advance of anticipated key catalysts, including the release of data from the PHALCON-EE Phase 3 trial of vonoprazan for the treatment of erosive esophagitis in October 2021, the release of data from the Phase 2 trial of vonoprazan for the treatment of non-erosive reflux disease in Q1/22 and the receipt of FDA approval and the commercial launch of vonoprazan-based regimens for the treatment of H. pylori in the second half of 2022. This non-dilutive financing extends Phathom’s projected cash runway to mid-2023 based on the company’s current operating plans.
“Vonoprazan has the potential to become the first innovative treatment for patients with acid-related disorders approved in the U.S. in more than 30 years,” Terrie Curran, president and CEO of Phathom Pharmaceuticals, said. “This non-dilutive $200 million term loan facility significantly strengthens our balance sheet ahead of vonoprazan’s potential U.S. commercial launch and provides Phathom with additional financial flexibility as we continue to work to change the landscape for patients with gastrointestinal diseases.”
“Hercules is proud to partner with Phathom ahead of several important milestones as they advance their vonoprazan development programs and prepare for a potential commercial launch,” Bryan Jadot, senior managing director and life sciences group head at Hercules Capital, said.
“The substantial capital commitment from Hercules aims to help Phathom deliver on their important mission to improve the lives of people suffering from acid related gastrointestinal diseases and reflects our dedication to financing promising life science companies,” Lake McGuire, managing director at Hercules Capital, said.
Under the terms of the $200 million term loan facility, $100 million was drawn at closing and an additional $100 million will become available in two tranches of $50 million each. The first $50 million tranche will become available upon the receipt of positive data from the PHALCON-EE Phase 3 trial. The second $50 million tranche will become available upon the occurrence of both FDA approval of a vonoprazan-based regimen for the treatment of H. pylori and FDA acceptance of filing of a new drug application for vonoprazan for the treatment of erosive esophagitis. Phantom Pharmaceutical will use approximately $54 million of the initial $100 million drawn down to pay off the principal of the company’s existing outstanding term loan. The new facility provides for an interest-only period of three years, which is extendable based on the achievement of certain regulatory milestones. The loan facility is secured by the company’s assets.
Armentum Partners acted as the Phantom Pharmaceuticals exclusive financial advisor on this transaction.