New Terms Provide for Lower Interest Rate and Longer Interest-Only
Payment Period
BOSTON--(BUSINESS WIRE)--Apr. 23, 2019--
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190423005852/en/
Source: Verastem, Inc.
Investors:
Joseph Rayne
Argot Partners
+1
617-340-6075
joseph@argotpartners.com
