Coherus BioSciences entered into a loan agreement with investment funds managed by Pharmakon Advisors. The agreement provides an up to $300 million credit facility, with funds spread across four tranches.
“As Coherus enters a period of projected, significant topline growth and diversification of our commercial product portfolio, we are pleased to partner with Pharmakon on this new credit facility,” Denny Lanfear, president and CEO of Coherus BioSciences, said. “Strengthening our balance sheet with non-dilutive capital will allow us to maximize shareholder value as we launch as many as five new products in 2022 and 2023.”
The first tranche of the facility was for $100 million and was drawn in connection with the close of the transaction, with $81.9 million used for the simultaneous repayment of the full balance outstanding on Coherus BioSciences’ previous term loan with HealthCare Royalty Partners.
Coherus BioSciences will draw a second tranche of $100 million no later than April 1, 2022, subject to certain conditions, including the conversion, repayment, repurchase or redemption of the company’s 8.2% senior convertible notes due March 2022.
A third tranche of $50 million will become available subject to certain conditions, including approval by the U.S. Food and Drug Administration of the biologics license application (BLA) for Coherus BioSciences’ PD-1 inhibitor, toripalimab, for nasopharyngeal carcinoma, which is currently under priority review with a target action date in April 2022.
A fourth tranche of $50 million will become available subject to certain conditions, including approval by the FDA of the BLA for CHS-201, a Lucentis (ranibizumab) biosimilar candidate, which is currently under review with a target action date of August 2022.
Borrowings under the credit agreement bear interest at 8.25% plus three-month LIBOR per annum with a LIBOR floor of 1%. The term loans mature on either the fifth anniversary of the closing date of the first tranche or Oct. 15, 2025, if the outstanding aggregate principal amount of the Coherus BioSciences’ 1.5% convertible senior subordinated notes due 2026 are greater than $50 million on Oct. 1, 2025.
The term loans can be prepaid at Coherus BioSciences’ discretion at any time, subject to prepayment fees. Repayment of outstanding principle of the term loans will be made in five equal quarterly payments of principle commencing after the 48-month anniversary of the closing date of the first tranche.
Coherus BioSciences is a commercial stage biopharmaceutical company.
