Aptevo Therapeutics, a biotechnology company focused on developing oncology and hematology therapeutics, closed on a $35 million term loan agreement with MidCap Financial.

“The $35 million term loan agreement further strengthens our balance sheet and provides additional operational flexibility at an attractive cost of capital,” said Marvin White, president and CEO. “Combined with the $65 million in total cash contribution from Emergent Biosolutions and the cash flow from our commercial products, Aptevo is well capitalized to pursue our corporate objectives and advance our novel pipeline of oncology and hematology therapeutics.”

The MidCap financing provides Aptevo with up to $35 million of potential borrowing capacity, which is available to the company in two tranches of $20 million and $15 million, at the company’s discretion, through January 2021. The agreement bears interest at a rate of LIBOR plus 7.60% per annum.

The first tranche, in the amount of $20 million, was funded on August 4, 2016 effective with closing of the term loan agreement. Aptevo will be able to draw the second tranche at its discretion after meeting the following financial covenants: achieving net commercial product revenue of $40 million on a trailing 12 month basis and receipt of a final cash installment of $20 million from Emergent BioSolutions to be paid within 6-12 months of the effective date of the separation, August 1, 2016.

MidCap Financial is a middle-market focused, specialty finance firm that provides senior debt solutions to businesses across all industries.