Sorrento Therapeutics, a clinical-stage biopharmaceutical company developing treatments for cancer and other diseases, entered into a loan and security agreement with Hercules Capital for up to $75 million.

The proceeds will be used for general corporate purposes allowing Sorrento the flexibility to consolidate core programs and more rapidly advance product opportunities in various therapeutic areas.

The debt is in the form of a secured loan, secured by Sorrento’s and certain of its domestic subsidiaries’ assets, excluding intellectual property, and bearing interest at a calculated prime-based variable rate currently at 9.25%.

The term loan is subject to funding in three tranches. A first tranche of $50 million was funded upon execution of the loan agreement on November 23, 2016. Under the terms of the loan agreement, Sorrento may, but is not obligated to, draw on two additional tranches. The second tranche of up to $10 million is available until September 30, 2017 subject to the achievement of certain funding and corporate milestones. The third tranche of up to $15 million is available until June 30, 2018 subject to Hercules’ approval. The term loan matures on December 1, 2020.

“We are pleased to announce this debt facility and relationship with Hercules, a leader in life science debt financing,” said Kevin Herde, EVP and CFO at Sorrento. “This debt facility strengthens our financial position, lowers our overall cost of capital, and provides further financial flexibility to execute our strategy as we prepare to meaningfully advance multiple product candidates over the near term.”

“Hercules is pleased to enter into this financing partnership with Sorrento at this important stage to allow them to continue to advance their pipeline and achieve their growth objectives,” said Scott Bluestein, chief investment officer at Hercules Capital. “This investment in Sorrento provides another example of our ability to finance life sciences companies through multiple stages of development and through various value inflection points.”