Akebia Therapeutics closes on $55 million secured term loan facility

By Mary-Katherine Stinson

Lexington, Ky., Jan. 30 – Akebia Therapeutics, Inc. closed on a credit agreement on Jan. 29 with Kreos Capital VII (UK) Ltd., which is managed by BlackRock, providing for a senior secured term loan facility totaling up to $55 million, according to an 8-K filing with the Securities and Exchange Commission.

Upon closing, $37 million was drawn down under the term loan.

The facility includes additional tranches available as follows: $8 million in a single draw (the tranche B loan) and $10 in a single draw (the tranche C loan) both available through Dec. 31, 2024.

Both the tranche B and tranche C loans are subject to marketing approval for vadadustat from the FDA. The tranche C loan is also subject to the receipt of cumulative gross cash proceeds after closing in the form of equity or equity-linked securities in one or more series of transactions.

The facility matures initially on March 31, 2025 but will be automatically extended to Jan. 29, 2028 if vadadustat FDA approval is received on or prior to June 30.

The facility will accrue interest at one-month term SOFR, subject to a floor of 4.25% per annum, plus a margin of 675 basis points.

There is an interest only period ending on Dec. 31, 2025, with an optional one-year extension to Dec. 31, 2026. If FDA approval for vadadustat is not received by June 30, the repayment schedule will accelerate, resulting in the termination of the interest only period on Oct. 1, 2024.

The facility also includes customary transaction fees and exit fees. The company can prepay the outstanding loans in full, but not in part, subject to a customary prepayment premium ranging from 1% to 4% of the prepaid amount. If prepayment is made during the first year, the company also is required to pay the amount of otherwise due interest payments for the 12-month period following prepayment.

Financial covenants require the company to either maintain cash and cash equivalents greater than or equal to $15 million or earn consolidated revenue of $150 million, both measured as of the last day of each fiscal month.

On closing, the company also entered a warrant agreement with lender affiliate Kreos Capital VII Aggregator SCSp, authorizing Kreos to purchase 3,076,923 shares of the stock at an exercise price of $1.30 per share. Akebia will issue at the time of drawdown of the tranche C loan, if applicable, a warrant to Kreos allowing the purchase of 1,153,846 shares of the company’s common stock, at an exercise price of $1.30 per share. Each warrant shall be exercisable for eight years.

Net proceeds of $34.5 million from the initial loan were used to fully repay the company’s prior term loan from Pharmakon.

The biopharmaceutical company is based in Cambridge, Mass.

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