Daily News: March 7, 2018

Hercules Provides $75MM Facility to Mesoblast

Cell-based medicine developer Mesoblast entered into a $75 million non-dilutive, four-year credit facility with specialty finance company Hercules Capital.

Proceeds will primarily be used towards funding the commercialization of MSC-100-IV, a treatment for children with steroid refractory acute graft versus host disease. The facility will also be used for the company’s additional late stage product candidates for patients with chronic heart failure and degenerative disc disease.

Mesoblast drew the first tranche of $35 million on closing. An additional $15 million may be drawn on or before Q4/18, and a further $25 million may be drawn on or before Q3/19, in each case as certain milestones are met. Interest on the facility will accrue at a rate of 9.45% per annum with the interest only period lasting up to 30 months upon the satisfaction of certain conditions.

Mesoblast Chief Executive Dr. Silviu Itescu stated, “This facility demonstrates the confidence Hercules Capital has in our compelling investment proposition. This credit facility enables us to progress our commercial plans for MSC-100-IV as it moves towards filing for regulatory approval in the United States for acute graft versus host disease.”

Scott Bluestein, chief investment officer of Hercules Capital, added, “This investment in Mesoblast provides another example of our ability to finance life sciences companies through multiple stages of development and through various value inflection points.”

Cantor Fitzgerald & Co. acted as exclusive arranger and financial advisor to Mesoblast in this transaction.