Urovant Sciences, a clinical-stage biopharmaceutical company focused on developing and commercializing innovative therapies for urologic conditions, announced it has entered into a debt financing agreement with Hercules Capital, Inc. for up to $100 million. Urovant plans to use the proceeds to fund ongoing development of its lead compound vibegron, for business development opportunities, and for general corporate purposes.
This financing provides Urovant additional flexibility to pursue development of vibegron, as well as other innovative therapies for urologic conditions. This puts Urovant in a stronger financial position, allows us to diversify our balance sheet, extends our cash runway, and enables us to choose when and to what extent we access available funding in order to help manage our cost of capital and dilution,
said Keith A. Katkin,
Chief Executive Officer of Urovant Sciences.
The Hercules term loan facility provides Urovant with up to $100 million in debt financing capacity. A first tranche of $15 million was funded upon closing, and the remaining $85 million is available in three additional optional tranches through June 30, 2021, subject to certain terms and conditions, including the achievement of certain milestones. At the closing of each tranche, Urovant will issue warrants to Hercules to purchase a number of common shares of Urovant equal to 2% of the loan amount funded, divided by an exercise price set at the closing price on the business day before funding (or at the lower of $9.02 for the first and second tranche).
The term loans bear a variable interest rate equal to the greater of 10.15% or 10.15% plus the prime rate minus 5.50% with a ceiling of 12.15%. The term loan matures 36 months from closing, with an option for a 12- to 18-month extension if certain milestones are met. Urovant’s obligations are secured by a first priority security interest on substantially all of their personal property except their intellectual property and subject to certain other exceptions.
Additional information about the financing agreement with Hercules will be contained in a Current Report on Form 8-K to be filed by Urovant with the U.S. Securities and Exchange Commission.