SAN DIEGO, Nov. 28, 2016 /PRNewswire/ -- Sorrento
Therapeutics, Inc. (NASDAQ: SRNE) ("Sorrento"), an
antibody-centric, clinical-stage biopharmaceutical company
developing new treatments for cancer and other unmet medical needs,
announces it has entered into a loan and security agreement with
Hercules Capital, Inc. (NYSE: HTGC) ("Hercules") for a term loan of
up to $75.0 million subject to
funding in three tranches. The proceeds will be used for general
corporate purposes allowing Sorrento the flexibility to consolidate
core programs and more rapidly advance product opportunities in
various therapeutic areas.
![Sorrento Therapeutics, Inc. Sorrento Therapeutics, Inc.](http://photos.prnewswire.com/prnvar/20150105/167173LOGO)
A first tranche of $50.0 million
was funded upon execution of the loan agreement on November 23, 2016. Prior to the funding by
Hercules, Sorrento paid off all obligations of its prior term loan
debt with other lenders. Under the terms of the loan
agreement, Sorrento may, but is not obligated to, draw on two
additional tranches. The second tranche of up to $10.0 million is available until September 30, 2017 subject to the achievement of
certain funding and corporate milestones. The third tranche of up
to $15.0 million is available until
June 30, 2018 subject to Hercules'
approval. The term loan will mature on December 1, 2020.
"We are pleased to announce this debt facility and relationship
with Hercules, a leader in life science debt financing," said
Kevin Herde, Executive Vice
President and Chief Financial Officer at Sorrento. "This debt
facility strengthens our financial position, lowers our overall
cost of capital, and provides further financial flexibility to
execute our strategy as we prepare to meaningfully advance multiple
product candidates over the near term."
"Hercules is pleased to enter into this financing partnership
with Sorrento at this important stage to allow them to continue to
advance their pipeline and achieve their growth objectives," said
Scott Bluestein, Chief Investment
Officer at Hercules Capital. "This investment in Sorrento provides
another example of our ability to finance life sciences companies
through multiple stages of development and through various value
inflection points."
The debt is in the form of a secured loan, secured by Sorrento's
and certain of its domestic subsidiaries' assets, excluding
intellectual property, and bearing interest at a calculated
prime-based variable rate currently at 9.25%. Payments under the
loan agreement are interest only until the first payment of
principal on July 1, 2018 (or if
Sorrento draws the second tranche, the interest only period is
extended with the first payment of principal on January 1, 2019), followed by equal monthly
payments of principal and interest through the scheduled maturity
date on December 1, 2020.
In connection with the loan agreement, Sorrento issued
Hercules a warrant to purchase shares of Sorrento Common Stock.
About Sorrento Therapeutics, Inc.
Sorrento is
an antibody-centric, clinical stage biopharmaceutical company
developing new treatments for cancer, inflammation and autoimmune
diseases. Sorrento's lead products are multiple late-stage
biosimilar and biobetter antibodies, as well as clinical CAR-T
therapies targeting solid tumors.
About Hercules Capital, Inc.
Hercules Capital,
Inc. (NYSE: HTGC) is the leading and largest specialty finance
company focused on providing senior secured venture growth loans to
high-growth, innovative venture capital-backed companies in a broad
variety of technology, life sciences and sustainable and renewable
technology industries. Since inception (December 2003), Hercules has committed more than
$6.3 billion to over 360 companies
and is the lender of choice for entrepreneurs and venture capital
firms seeking growth capital financing.
Forward-Looking Statements
This press release
and any statements made for and during any presentation or meeting
contain forward-looking statements related to Sorrento
Therapeutics, Inc. and its subsidiaries, under the safe harbor
provisions of Section 21E of the Private Securities Litigation
Reform Act of 1995 and are subject to risks and uncertainties that
could cause actual results to differ materially from those
projected. Forward-looking statements include statements regarding
the potential use of debt proceeds and potential benefits of the
transaction. Risks and uncertainties that could cause our actual
results to differ materially and adversely from those expressed in
our forward-looking statements, include, but are not limited to:
risks related to Sorrento's and its subsidiaries' technologies and
prospects and other risks that are described in Sorrento's most
recent periodic reports filed with the Securities and Exchange
Commission, including Sorrento's Annual Report on Form 10-K for the
year ended December 31, 2015, as amended. Investors are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this release and we
undertake no obligation to update any forward-looking statement in
this press release except as required by law.
Sorrento® and the Sorrento logo are registered trademarks of
Sorrento Therapeutics, Inc.
All other trademarks and trade names are the property of their
respective owners.
© 2016 Sorrento Therapeutics, Inc. All Rights
Reserved.
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SOURCE Sorrento Therapeutics, Inc.