By Susanna Moon
Chicago, May 5 - Alexza Pharmaceuticals, Inc. and subsidiary Symphony Allegro, Inc. secured a $15 million term loan from Hercules Technology Growth Capital, Inc. on May 4, according to an 8-K filed Wednesday with the Securities and Exchange Commission.
The principal balance of the loan advance bears interest from the funding date of the advance at the higher of 10.75% or the Prime rate plus 650 basis points, up to a maximum rate of 14%.
The loan is payable in 33 equal monthly installments of principal and interest beginning Feb. 1, 2011 and continuing on the first business day of each month thereafter until the loan has been paid in full. That date will be extended to May 1, 2011, however, if the U.S. Food and Drug Administration approves the company's product candidate AZ-004 Staccato loxapine for public sales and marketing in the United States by Feb. 1, 2011.
At its option, Alexza may prepay the loan advance.
Hercules secured the right to participate in private offerings of stock by Alexza for up to $1 million.
The investor also received a warrant to purchase 376,394 common shares for five years at an exercise price of $2.69 per share, which was the 50-day average daily weighted average public trading price of the company's common stock at the time the term sheet was issued by Hercules.
"We are very pleased to secure this working capital financing," August J. Moretti, senior vice president and chief financial officer of Alexza, said in a press release.
"This loan is an important piece of our corporate finance strategy at Alexza. The proceeds will extend our operating runway as we undertake the transition to commercialization of our lead product candidate, AZ-004 (Staccato loxapine) which has a PDUFA goal date of Oct. 11, 2010."
Alexza is a Palo Alto, Calif., pharmaceutical company.
| Issuer: | Alexza Pharmaceuticals, Inc.
|
| Issue: | Term loan
|
| Amount: | $15 million
|
| Maturity: | 33 months beginning Feb. 1, 2011
|
| Coupon: | Higher of 10.75% or Prime rate plus 650 bps, capped at 14%
|
| Price: | Par
|
| Investor: | Hercules Technology Growth Capital, Inc.
|
| Warrants: | For 376,394 common shares
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $2.69
|
| Pricing date: | May 4
|
| Stock symbol: | Nasdaq: ALXA
|
| Stock price: | $3.41 at close May 3
|
| Market capitalization: | $185.03 million
|
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