Phathom Pharmaceuticals, a biopharmaceutical company focused on developing and commercializing novel treatments for gastrointestinal diseases, completed an amendment to its term loan facility from Hercules Capital, a provider of customized debt financing for companies in life sciences and technology-related markets. Sagard Healthcare is also participating in the term loan facility.
The amendment increases the total term loan facility up to $300 million with more favorable terms, including the extension of the interest-only period and maturity date from Oct. 1, 2026, to Dec. 1, 2027. Phathom has drawn $40 million upon the closing of the amendment, aggregating to $140 million currently outstanding under the expanded loan facility. Phathom has estimated the amended terms result in cash savings of approximately $20 million based upon the original maturity date of the loan and $200 million in advances.
“We appreciate our partnership with Hercules Capital and Sagard Healthcare and believe the economics under this loan agreement, including the potential to receive up to an additional $100 million in non-dilutive financing, provides Phathom the financial flexibility necessary to execute the ongoing launch of VOQUEZNA and help fund future clinical development programs,” Molly Henderson, chief financial and business officer at Phathom, said. “These potential additional debt proceeds, when added to our current financial resources and projected product revenues, we believe will be sufficient to fund our projected level of operations through 2026.”
“Hercules is excited to expand and extend our financing partnership with Phathom at this important stage as they advance the commercial launch of VOQUEZNA in the U.S. The new increased commitment from Hercules reflects our dedication to Phathom and is intended to support their efforts to make their novel treatments available to patients,” Michael Dutra, managing director at Hercules Capital, said.
“Today’s announcement exemplifies our ability to be long-term capital partners and reflects our commitment to financing promising life science companies through development and into commercialization,” Lake McGuire, managing director at Hercules Capital, said.
Under the terms of the amendment, the remaining $160 million of the aggregate $300 million loan facility is potentially available in five tranches. A tranche of $10 million is available through March 15, 2024, and the following two tranches of $25 million each are available to be drawn through June 15, 2024, and Dec. 15, 2024, respectively. The final two tranches of $50 million each will be available, subject to the achievement of certain revenue milestones through June 30, 2025, and Dec. 31, 2025, respectively.
