Theratechnologies, a biopharmaceutical company focused on the development and commercialization of innovative therapies, received a binding commitment with respect to a non-dilutive term loan with an affiliate of Marathon Asset Management for up to $100 million.
“Through this non-dilutive facility, we have gained a strong partner and supporter in Marathon Asset Management,” Paul Lévesque, president and CEO of Theratechnologies, said. “The term loan is a significant vote of confidence by a leading healthcare investor and serves to materially strengthen our ongoing execution capabilities. Our strategic priorities include the advancement of our clinical oncology pipeline, which is currently in a larger Phase 1b basket study, and the rapid growth of our existing marketed brands, EGRIFTA SV and Trogarzo. We are fortunate to have a strong commercial division with a refocused concentration on revenue growth in North America, our core market. We now have every element in place to ensure we can execute on our future plans and benefit from an extended cash runway.”
The facility is subject to the terms and conditions of a credit agreement. Highlights of the agreement are as follows:
- Senior secured term loan of up to $100 million available across multiple tranches
- $40 million is expected to be funded on or before July 29, 2022 (Tranche 1)
- $20 million to be made available through June 2023, subject to the satisfaction of defined milestones (Tranche 2)
- $15 million to be made available through March 2024 subject to the satisfaction of defined milestones, (Tranche 3)
- An additional $25 million will be available to Theratechnologies until December 2024 upon meeting certain defined milestones (Tranche 4)
- The facility will have an initial term of five years (six years if Tranche 3 is drawn), provide for an interest-only period of 24 months (36 months if Tranche 3 is drawn prior to Dec. 31, 2023), and bear interest at the Secured Overnight Financing Rate (SOFR) plus 9.50%, subject to a SOFR floor of 1.00%)
- The company has agreed to purchase $30 million of the principal amount of the convertible notes due June 2023, at a discount to par, in privately negotiated agreements with United States based noteholders, which are expected to close on or before July 29, 2022.
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“We are strong believers in Theratechnologies’ portfolio of therapeutic assets, and we have been impressed with this management team’s commitment to addressing patients’ needs,” Evan Bedil, head of healthcare at Marathon, said. “We are pleased to offer this non-dilutive financing that will help fund the company’s growth well into the future.”
Truist Securities acted as exclusive financial advisor to Theratechnologies on this transaction.
Covington & Burling acted as external counsel to Marathon Asset Management on this transaction.
