By Lisa Kerner
Charlotte, N.C., June 3 - Exelixis, Inc. said it entered into agreements providing for two separate financing transactions with Deerfield Management and Silicon Valley Bank to raise a total of $160 million in capital.
The South San Francisco, Calif.-based pharmaceutical company expects to use the proceeds to finance the repayment of the remaining obligations under its loan from GlaxoSmithKline and to fund development activities related to its lead compound, XL184.
Exelixis agreed to sell $124 million initial principal amount of senior secured notes due June 2015 to Deerfield Private Design Fund, LP and Deerfield Private Design International, LP for a total of $80 million.
The notes will bear interest in the annual amount of $6 million, payable quarterly in arrears.
Exelixis is required to made mandatory prepayments annually in 2013, 2014 and 2015 equal to 15% of certain revenues, according to a form 8-K filed with the Securities and Exchange Commission.
The annual prepayments are subject to a maximum amount of $27.5 million due in January 2013 and $10 million due in January 2014 and January 2015, the filing said.
Exelixis may voluntarily prepay all or a portion of the notes prior to maturity.
The Deerfield transaction is expected to close by July 2.
Exelixis' transaction with Silicon Valley Bank is an extension of its existing credit facility and provides for a new $80 million, seven-year term loan, according to a company news release.
The principal amount outstanding under the term loan will accrue interest at 1% per year, payable monthly, and will be fully secured by deposit accounts with Silicon Valley Bank.
Exelixis expects to close the transaction by June 4.
The blended cost of capital for both transactions is expected to remain under 10%.
"After considering a variety of options, we believe that these transactions together offer the most attractive approach to meeting our financial and strategic objectives while managing shareholder dilution," executive vice president and chief financial officer Frank Karbe said in the release.
| Issuer: | Exelixis, Inc.
|
| Issue: | Senior secured notes
|
| Amount: | $124 million
|
| Proceeds: | $80 million
|
| Maturity: | Five years
|
| Interest: | $6 million annually
|
| Call option: | At any time
|
| Distribution: | Private placement
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
