Verastem Oncology Announces Amendment to Refinance Hercules Loan Facility
April 23 2019 - 4:05PM
Business Wire
New Terms Provide for Lower Interest Rate and
Longer Interest-Only Payment Period
Verastem, Inc. (Nasdaq: VSTM) operating as Verastem Oncology,
(or the “Company”), focused on developing and commercializing
medicines seeking to improve the survival and quality of life of
cancer patients, today announced its entry into an amendment (the
“Fourth Amendment”) to its existing Loan and Security Agreement
with Hercules Capital, Inc. (NYSE: HTGC) (“Hercules”), changing
certain terms of the agreement and increasing the borrowing limit
from $50 million to $75 million in financing. The increased loan
facility proceeds will be available for the ongoing launch of
COPIKTRA™ in the U.S., the Company’s other ongoing development
programs, and for general corporate purposes, subject to certain
conditions of funding.
“We are extremely pleased to execute this new amendment with
Hercules as it effectively refinances our existing loan and
implements more favorable terms which we believe are more in line
with a commercial stage financing arrangement, including a lower
overall interest rate and an extended repayment timeline,” said Rob
Gagnon, Chief Financial Officer of the Company. “Collectively, the
new terms provide greater financial flexibility as we continue to
execute on the commercial rollout of COPIKTRA and advance our other
pipeline programs. We are fortunate to have such a strong
partnership with Hercules, and we appreciate their willingness to
work with us to reframe the structure of earlier terms in a way
that is helpful to the Company and its stakeholders.”
Under the prior agreement, the term loan provided for
interest-only payments until May 1, 2019. Thereafter, amortization
payments were to be payable monthly in twenty installments of
principal and interest. Under the Fourth Amendment, the term loan
will now mature on December 1, 2022 and provides for interest-only
payments until April 1, 2021, which may be extended pursuant to the
achievement of certain revenue metrics. In addition, this amendment
lowers the interest rate by 175 basis points.
Per the terms of the Fourth Amendment, the Company may borrow up
to an aggregate amount of $75.0 million, of which $35.0 million was
outstanding as of the date of the Fourth Amendment (as a result of
the $25.0 million of outstanding principal under the prior
agreement and an additional $10.0 million being drawn by the
Company on the date of the Fourth Amendment). The remaining $40.0
million of borrowing capacity may be drawn in multiple tranches,
including $15.0 million upon Verastem Oncology generating certain
pre-specified cumulative net product revenues, and $25.0 million
available through December 31, 2021, subject to Hercules’ approval
and certain pre-specified conditions.
About Verastem Oncology
Verastem Oncology (Nasdaq: VSTM) is a commercial
biopharmaceutical company committed to the development and
commercialization of medicines to improve the lives of patients
diagnosed with cancer. We are driven by the strength, tenacity and
courage of those battling cancer – single-minded in our resolve to
deliver new therapies that not only keep cancer at bay, but improve
the lives of patients diagnosed with cancer. Because for us, it’s
personal.
Our first FDA approved product is now available for the
treatment of patients with certain types of indolent non-Hodgkin’s
lymphoma (iNHL). Our pipeline comprises product candidates that
seek to treat cancer by modulating the local tumor
microenvironment. For more information, please visit
www.verastem.com.
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Investors:Joseph RayneArgot Partners+1
617-340-6075joseph@argotpartners.com
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