Stealth BioTherapeutics, a clinical-stage biotechnology company focused on the discovery, development and commercialization of novel therapies for diseases involving mitochondrial dysfunction, completed a $25 million long-term debt facility led by Horizon Technology Finance. Stealth has drawn down $15 million under the facility with an additional $10 million available upon achievement of a predetermined milestone.
“We are pleased to partner with Horizon to address our funding needs in a manner that balances our near-term capital requirements with our sensitivity to shareholder dilution,” Reenie McCarthy, CEO of Stealth BioTherapeutics, said. “This transaction strengthens and extends our financial resources as we plan to initiate several new clinical trials in the coming months, progress our commercial planning for Barth syndrome, for which we have recently submitted an NDA that is subject to FDA review, and prepare for Phase 2 data readout in extra-foveal geographic atrophy associated with dry AMD.”
“We are delighted to provide this financing that will enable Stealth to advance its development of novel therapies for rare and common diseases of mitochondrial dysfunction for which there are no approved treatments,” Gerald A. Michaud, president of Horizon Technology Finance, said. “This investment in Stealth provides another example of our ability to finance life sciences companies through multiple stages of development and through various value inflection points.”
Of the total facility, $15 million was funded upon closing and $5.7 million of that was utilized to payoff Stealth’s existing term loan with Hercules Capital. The additional $10 million available under the facility may be funded upon Stealth achieving a predetermined milestone. Each advance under the debt facility will be repaid in 48 monthly payments consisting of 18 monthly payments of interest only, followed by 30 monthly payments of principal and accrued interest, and will be payable monthly in arrears. The interest-only period may be extended to 24 months contingent upon Stealth achieving certain milestones, followed by 24 monthly payments of principal and accrued interest. In connection with the financing, Stealth issued Horizon warrants to purchase up to 13,636,364 ordinary shares at an exercise price of $0.11 per share (or $1.33 per American Depository Share (ADS) of the company on an ADS equivalent basis). Stealth will use proceeds from the facility to support the ongoing clinical development of investigational product candidates within its pipeline and for general working capital purposes.