Arrowhead Pharmaceuticals has entered into a strategic financing agreement with Sixth Street for long-term, non-dilutive capital to fund innovation and growth opportunities across Arrowhead’s pipeline of RNAi therapeutics. The $500 million senior secured credit facility includes $400 million funded at close with an additional $100 million available at Arrowhead’s option, subject to mutual agreement between Sixth Street and Arrowhead, during the seven-year term of the agreement.
“This deal and its favorable structure and economics allow us to confidently build our commercial capabilities to support our first commercial launch in 2025, provided we receive regulatory approval for plozasiran in familial chylomicronemia syndrome,” Christopher Anzalone, president and CEO of Arrowhead, said. “This transaction is non-dilutive and has an attractive repayment structure, which largely aligns outflows with future inflows, allowing us to keep more cash in the business at a critical time of growth. In addition, because of the flexible repayment mechanics during the seven-year term, it has important risk sharing features. Not only does the facility allow us to support plozasiran as we move toward a commercial launch, it also expands our ability to fund growth and innovation across our pipeline.”
“Arrowhead Pharmaceuticals has an impressive platform technology, attractive pipeline assets with promising commercial opportunities, and multiple partnerships maturing toward commercialization,” Jeff Pootoolal, partner at Sixth Street, and Michael Reslinski, managing director of Sixth Street, said. “We are pleased to utilize our firm’s scale, expertise and flexibility to help Arrowhead meet its strategic objectives through this innovative financing solution, and we hope to continue strengthening our relationship with the company as it rapidly becomes one of the most exciting emerging commercial-stage biopharmaceutical companies.”
The credit facility matures on Aug. 7, 2031 and bears interest at an annual rate of 15%. The credit facility does not provide for scheduled amortization payments during the term, and all principal will be due on the maturity date. Arrowhead will have the right to prepay loans under the credit facility at any time.
The company is required to partially repay loans under the credit facility with a portion of the proceeds from certain transactions, such as the future collection of upfront payments, milestones and royalties from partnerships and collaborations and commercial revenue by Arrowhead. All obligations will be secured on a first-priority basis, subject to certain exceptions, by security interests in substantially all assets of the company.
TD Cowen acted as financial advisor and Gibson, Dunn & Crutcher served as legal advisor to Arrowhead. Proskauer Rose and Mintz, Levin, Cohn, Ferris, Glovsky & Popeo acted as legal advisors to Sixth Street.
