Hercules Capital amended the existing term loan facility agreement it has with Axsome Therapeutics, a biopharmaceutical company developing novel therapies for the management of central nervous system (CNS) disorders, to increase the size of the facility to $300 million and the amount immediately available upon FDA approval of AXS-05 for major depressive disorder to $100 million at the company’s option. The amendment also extends the maturity and interest-only period of the facility.
“We are pleased with the amendment to our term loan facility, resulting in $100 million of non-dilutive capital immediately available upon the potential approval of AXS-05 and access to an additional $150 million thereafter,” Herriot Tabuteau, MD, CEO of Axsome Therapeutics, said. “With improved financial terms, this committed capital further increases our financial flexibility through the anticipated commercial launches of AXS-05 for major depressive disorder and AXS-07 for migraine and will allow Axsome to accelerate access to these critical therapies for millions of patients in need.”
“Hercules is excited to expand its partnership with Axsome, which has two NDAs under review for AXS-05 in depression and AXS-07 in migraine, as it advances its differentiated pipeline and prepares for commercialization,” Michael Dutra, managing director at Hercules Capital, said. “This substantial financial commitment from Hercules exemplifies our dynamic ability to customize financing solutions to support innovative life sciences companies such as Axsome through development and commercialization.”
Under the terms of the amendment, the size of the term loan facility was increased to $300 million from $225 million, and the amount available at the Axsome’s option immediately upon approval of AXS-05 in major depressive disorder was increased to $100 million from $35 million. An additional $150 million may be drawn at the company’s option in three separate tranches, consisting of $20 million upon approval of AXS-07 for migraine, $55 million upon achievement of certain combined sales and outstanding debt criteria and, subject to the approval of Hercules Capital, $75 million to support future strategic initiatives, including further pipeline advancement or expansion. A total of $50 million was funded upon the initial closing.
The amended term loan facility now bears interest at a calculated prime-based variable rate currently at 8.95% compared with the original 9.15%. The amendment extends the maturity date of the facility from the October 2025 to October 2026 and optionally to October 2027, subject to certain conditions. The amendment also resets the interest-only payment period and extends it from the initial 30 months from the original loan closing to at least 48 months from the amendment closing and up to 60 months from the amendment closing based on approval of AXS-05 and AXS-07.
