Synergy Pharmaceuticals Secures $300 Million Debt Financing
September 05 2017 - 8:30AM
Business Wire
Synergy Pharmaceuticals Inc. (NASDAQ: SGYP), announced today
that the Company has closed on a $300 million debt financing
structured as senior secured loans from CRG LP, a healthcare
focused investment firm, and its lender syndicate.
“This non-dilutive financing enhances our cash position and
provides us with financial flexibility to continue to execute on
the launch of TRULANCE and achieve our business objectives, which
we are confident will ultimately maximize long-term shareholder
value,” said Gary Gemignani, EVP and Chief Financial Officer of
Synergy Pharmaceuticals Inc. “The structure of this financing
provides us with access to capital for support of our
commercialization of TRULANCE and funds our current plans for the
Company through 2019 when, based on our current assumptions, we
expect to be cash flow breakeven.”
“We are excited for the opportunity to support Synergy at this
important stage in the commercialization of TRULANCE,” said Luke
Düster, Managing Director of CRG. “As part of our investment
process at CRG, we performed extensive due diligence on TRULANCE,
the market opportunity and Synergy’s overall business and
commercial strategy. The results confirmed that TRULANCE has a
substantial opportunity to serve the GI community and that there is
tremendous potential to add significant value to the Company. This
transaction demonstrates our confidence in Synergy’s product,
commercial strategy and its team’s ability to optimize TRULANCE and
successfully capitalize on this large and growing market.”
“We are pleased to partner with CRG, an investment partner that
is known for its strategic investments in healthcare,” said Gary S.
Jacob, Chairman and Chief Executive Officer of Synergy, “We remain
committed to maximizing the potential benefit of TRULANCE and
bringing this important new treatment option to healthcare
providers and patients.”
Transaction Terms
The first tranche of $100 million was funded upon execution of
the loan documents. The loan agreement provides for future
borrowings, subject to the satisfaction of certain financial and
revenue milestones and other borrowing conditions as follows: (i)
an additional $100.0 million on or before February 28, 2018, and
(ii) up to two additional tranches of up to $50.0 million each on
or before March 29, 2019. The loans mature on June 30, 2025 and
payments under the loan are interest only paid quarterly for the
initial five-year period, followed by 12 equal quarterly
installments of principal and interest during the final three years
of the term, which converts to an eight-year interest only period
if certain milestones are achieved. The loans carry an annual
interest rate of 9.50%. The Company maintains the option to prepay
outstanding loan amounts during the term of the loan. Further
information with respect to the non-dilutive debt financing
agreement with CRG are set forth in the Form 8-K to filed by the
Company with the Securities and Exchange Commission reporting the
entry into the loan transaction on September 1, 2017.
Royalty/Revenue Interest Capital Advisors served as exclusive
financial advisor for this transaction.
About Synergy Pharmaceuticals Inc.
Synergy is a biopharmaceutical company focused on the
development and commercialization of novel GI therapies. The
company has pioneered discovery, research and development efforts
on analogs of uroguanylin, a naturally occurring and endogenous
human GI peptide, for the treatment of GI diseases and disorders.
Synergy’s proprietary GI platform includes one commercial product
TRULANCE and a second lead product candidate, dolcanatide. For more
information, please visit www.synergypharma.com.
About CRG
CRG is a premier healthcare-focused investment firm with more
than $3.0 billion of assets under management across more
than 45 portfolio companies. The firm seeks to commit
between $20 to $300 million in each investment across the
healthcare spectrum, including: medical devices,
biopharmaceuticals, tools & diagnostics, services and
information technology. CRG provides growth capital in the form of
long-term debt and equity to support innovative, commercial-stage
healthcare companies that address large, unmet medical needs. The
firm partners with public and private companies to provide flexible
financing solutions and world-class support to achieve exceptional
growth objectives with minimal dilution. CRG maintains offices in
Boulder, Houston and New York. For more information,
please visit www.crglp.com.
Forward-Looking Statement
This press release and any statements made for and during any
presentation or meeting contain forward-looking statements related
to Synergy Pharmaceuticals Inc. under the safe harbor provisions of
Section 21E of the Private Securities Litigation Reform Act of 1995
and are subject to risks and uncertainties that could cause actual
results to differ materially from those projected. These statements
may be identified by the use of forward-looking words such as
"anticipate," "planned," "believe," "forecast," "estimated,"
"expected," and "intend," among others. There are a number of
factors that could cause actual events to differ materially from
those indicated by such forward-looking statements. These factors
include, but are not limited to, the timing and potential for
successful development, launch, introduction and commercial
potential of TRULANCE; growth and opportunity, including peak sales
and the potential demand for TRULANCE, as well as its potential
impact on applicable markets; market size; substantial competition;
our ability to fund the payment of interest and principal of the
loan amounts and to continue as a going concern; our need for
additional financing; uncertainties of patent protection and
litigation; uncertainties of government or third party payer
reimbursement; dependence upon third parties; our financial
performance and results, including the risk that we are unable to
manage our operating expenses or cash use for operations, or are
unable to commercialize our products, within the guided ranges or
otherwise as expected; and risks related to failure to obtain FDA
clearances or approvals and noncompliance with FDA regulations. As
with any pharmaceutical under development, there are significant
risks in the development, regulatory approval and commercialization
of new products. There are no guarantees that future clinical
trials discussed in this press release will be completed or
successful or that any product will receive regulatory approval for
any indication or prove to be commercially successful. Investors
should read the risk factors set forth in Synergy's most recent
periodic reports filed with the Securities and Exchange Commission,
including Synergy’s Form 10-K for the year ended December 31, 2016.
While the list of factors presented here is considered
representative, no such list should be considered to be a complete
statement of all potential risks and uncertainties. Unlisted
factors may present significant additional obstacles to the
realization of forward-looking statements. Forward-looking
statements included herein are made as of the date hereof, and
Synergy does not undertake any obligation to update publicly such
statements to reflect subsequent events or circumstances except as
required by law.
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version on businesswire.com: http://www.businesswire.com/news/home/20170905005778/en/
Synergy Pharmaceuticals Inc.Gem Hopkins, 212-584-7610VP,
Investor Relations and Corporate
Communicationsghopkins@synergypharma.com
Synergy Pharmaceuticals, Inc. (NASDAQ:SGYP)
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