Syndax enters $30 million loan agreement with Hercules Capital

By Wendy Van Sickle

Columbus, Ohio, Feb. 10 – Syndax Pharmaceuticals Inc. entered into a loan and security agreement with Hercules Capital, Inc., which provides for borrowings of up to $30 million, comprising a $20 million term loan, which was funded on Friday, and an additional term loan of up to $10 million, available for borrowing until Dec. 15, according to an 8-K filing with the Securities and Exchange Commission.

Borrowings bear interest at a rate equal to the greater of 9.5% or the Wall Street Journal prime rate plus 510 basis points.

Borrowings are repayable in monthly interest-only payments through Oct. 1, 2021, or April 1, 2022 if the phase 3 clinical trial of entinostat in patients with advanced hormone receptor positive, human epidermal growth factor receptor 2 negative, breast cancer has achieved the primary efficacy endpoint sufficient to file an NDA as the next step in clinical development.

After the interest-only payment period, borrowings are repayable in equal monthly payments of principal and accrued interest until the maturity date, which is either Sept. 1, 2023, or March 1, 2024 upon achievement of the entinostat performance milestone.

At its option, the company may prepay all of the outstanding borrowings, subject to a prepayment premium equal to 2% of the principal amount outstanding if the prepayment occurs during the first year following the applicable loan being funded, with step-downs to 1.5% in the second year and 1% starting in the third year.

The company also paid a $100,000 facility charge upon closing and will pay a $50,000 facility charge in connection with the advance of the undrawn tranche.

The loan agreement also provides for a final payment, payable upon maturity or the repayment in full of all obligations under the agreement, of up to $998,000.

The loan agreement includes a minimum cash covenant of $12.5 million commencing on Sept. 30, subject to reduction upon satisfaction of some conditions.

The biopharmaceutical company is based in Waltham, Mass.

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