Theratechnologies Announces Binding Commitment for a Non-Dilutive Term Loan of up to $100 million from Marathon Asset Management
July 13 2022 - 6:40AM
Theratechnologies Inc. (“Theratechnologies” or “the Company”) (TSX:
TH) (NASDAQ: THTX), a biopharmaceutical company focused on the
development and commercialization of innovative therapies, today
announced that it has received a binding commitment with respect to
a non-dilutive term loan with an affiliate of Marathon Asset
Management for up to $100 million. All dollar amounts are
expressed in U.S. dollars, unless otherwise stated.
“Through this non-dilutive facility, we have
gained a strong partner and supporter in Marathon Asset
Management,” said Paul Lévesque, President and Chief Executive
Officer, Theratechnologies. “The term loan is a significant vote of
confidence by a leading healthcare investor and serves to
materially strengthen our ongoing execution capabilities. Our
strategic priorities include the advancement of our clinical
oncology pipeline, which is currently in a larger Phase 1b basket
study, and the rapid growth of our existing marketed brands,
EGRIFTA SV® and Trogarzo®. We are fortunate to have a strong
commercial division with a refocused concentration on revenue
growth in North America, our core market. We now have every element
in place to ensure we can execute on our future plans and benefit
from an extended cash runway,” concluded Mr. Lévesque.
The facility is subject to the terms and
conditions of a credit agreement. Highlights of the agreement are
as follows:
- Senior secured
term loan of up to $100 million available across multiple
tranches;
- $40 million is
expected to be funded on or before July 29, 2022 (Tranche 1);
- $20 million to
be made available through June 2023, subject to the satisfaction of
defined milestones (Tranche 2);
- $15 million to
be made available through March 2024 subject to the satisfaction of
defined milestones, (Tranche 3);
- An additional
$25 million will be available to Theratechnologies until December
2024 upon meeting certain defined milestones (Tranche 4);
- The facility
will have an initial term of five years (six years if Tranche 3 is
drawn), provide for an interest-only period of 24 months (36 months
if Tranche 3 is drawn prior to December 31, 2023), and bear
interest at the Secured Overnight Financing Rate (SOFR) plus 9.50%,
subject to a SOFR floor of 1.00%); and,
- The Company has
agreed to purchase $30 million of the principal amount of the
Convertible Notes due June 2023, at a discount to par, in privately
negotiated agreements with United States based noteholders, which
are expected to close on or before July 29, 2022;
“We are strong believers in Theratechnologies’
portfolio of therapeutic assets, and we have been impressed with
this management team’s commitment to addressing patients’ needs,”
said Evan Bedil, Head of Healthcare at Marathon. “We are pleased to
offer this non-dilutive financing that will help fund the company’s
growth well into the future.”
Truist Securities
acted as exclusive financial advisor to Theratechnologies on this
transaction.
Covington &
Burling LLP acted as external counsel to Marathon Asset Management
LP on this transaction.
About Theratechnologies
Theratechnologies (TSX: TH) (NASDAQ: THTX) is a biopharmaceutical
company focused on the development and commercialization of
innovative therapies addressing unmet medical needs. Further
information about Theratechnologies is available on the Company's
website at www.theratech.com, on SEDAR at www.sedar.com and on
EDGAR at www.sec.gov.
About Marathon Asset Management
LPMarathon Asset Management LP, with $22 billion of assets
under management, was formed in 1998 by Bruce Richards (Chairman
& Chief Executive Officer) and Louis Hanover (Chief Investment
Officer). The firm seeks attractive absolute returns through
investments in the global capital markets and the private credit
markets whereby it is known for its ability to provide capital
solutions to companies across industries. Marathon’s healthcare
team, led by Dr. Evan Bedil, is known for buying pharmaceutical
royalties in addition to providing capital solutions across the
capital structure to emerging biopharmaceutical companies. Marathon
has significant experience investing in companies through multiple
cycles and possesses a broad-based skill set and proprietary
platform to research, analyze and act upon complex capital
structures and situations. For additional information, please visit
www.marathonfund.com.
Forward-Looking InformationThis press release
contains forward-looking statements and forward-looking
information, or, collectively, forward-looking statements, within
the meaning of applicable securities laws, that are based on our
management’s beliefs and assumptions and on information currently
available to our management. You can identify forward-looking
statements by terms such as "may", "will", "should", "could",
“promising”, “would”, "outlook", "believe", "plan", "envisage",
"anticipate", "expect" and "estimate", or the negatives of these
terms, or variations of them. The forward-looking statements
contained in this press release include, but are not limited to,
statements regarding the availability of the term loan, the
development of our clinical oncology pipeline, our revenue growth
derived from the sale of our products, cash flow generation from
our commercial business and the execution of our business plan.
Although the
forward-looking information contained in this press release is
based upon what the Company believes are reasonable assumptions in
light of the information currently available, investors are
cautioned against placing undue reliance on this information since
actual results may vary from the forward-looking information.
Certain assumptions made in preparing the forward-looking
statements include that: the Company will meet all of the terms and
conditions of the credit agreement to draw down the various
tranches of the term loan; the Company will not be in default under
the terms of the loan facility; sales of EGRIFTA SV® and Trogarzo®
in the United States will continue increasing over time; the
Company’s commercial practices in the United States will not be
found to be in violation of applicable laws; the long-term use of
EGRIFTA SV® and Trogarzo® will not change their respective current
safety profile; no recall or market withdrawal of EGRIFTA SV® and
Trogarzo® will occur; no laws, regulation, order, decree or
judgment will be passed or be issued by a governmental body
negatively affecting the marketing, promotion or sale of EGRIFTA
SV® and Trogarzo® in the United States; continuous supply of
EGRIFTA SV® and Trogarzo® will be available; the Company’s
relations with third-party suppliers of EGRIFTA SV® and Trogarzo®
will be conflict-free and such third-party suppliers will have the
capacity to manufacture and supply EGRIFTA SV® and Trogarzo® to
meet market demand on a timely basis; no biosimilar version of
EGRIFTA SV® will be approved by the FDA; the Company’s intellectual
property will prevent companies from commercializing biosimilar
versions of EGRIFTA SV® in the United States; the Company will be
able to recruit patients to conduct its basket trial studying
tesamorelin for the potential treatment of cancer; no manufacturing
issues will prevent the manufacturer of TH1902 to supply TH1902 to
the Company to pursue the basket trial in oncology; results
obtained in preclinical trial using TH1902 will be replicated into
humans; and the Company’s business plan will not be substantially
modified.
Forward-looking
information assumptions are subject to a number of risks and
uncertainties, many of which are beyond Theratechnologies’ control
that could cause actual results to differ materially from those
that are disclosed in or implied by such forward-looking
information. These risks and uncertainties include, but are not
limited to, those related to or arising from: non-compliance by the
Company with the terms and conditions of the term loan; the
occurrence of an event of default under the term loan triggering
the accelerated reimbursement of any outstanding draw down amounts;
the Company’s failing its sales efforts and sales initiatives; the
inability of the Company’s suppliers to meet demand for the
performance of services or the provision of goods; the Company’s
ability and capacity to grow the sales of EGRIFTA SV® and Trogarzo®
successfully in the United States; the Company’s capacity to meet
supply and demand for its products; the continuation of the
Company’s collaborations and other significant agreements with its
existing commercial partners and third-party suppliers; the
Company’s success in continuing to seek and maintain reimbursements
for EGRIFTA SV® and Trogarzo® by third-party payors in the United
States; the success and pricing of other competing drugs or
therapies that are or may become available in the marketplace; the
Company’s ability to protect and maintain its intellectual property
rights in EGRIFTA SV® and tesamorelin; the Company’s ability to
successfully conduct its ongoing basket trial in oncology; the lack
of positive results stemming from the Company’s basket trial; the
discovery of a cure for HIV; the Company’s expectations regarding
its financial performance, including revenues, expenses, gross
margins, profitability, liquidity, capital expenditures and income
taxes; the Company’s ability to abide by the terms and conditions
set forth in the credit agreement; and the Company’s estimates
regarding its capital requirements.
We refer current and
potential investors to the “Risk Factors” section of our Annual
Information Form dated February 23, 2022 available on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov as an exhibit to our
report on Form 40-F dated February 24, 2022 under
Theratechnologies’ public filings. The reader is cautioned to
consider these and other risks and uncertainties carefully and not
to put undue reliance on forward-looking statements.
Forward-looking statements reflect current expectations regarding
future events and speak only as of the date of this press release
and represent our expectations as of that date.
We undertake no obligation to update or revise
the information contained in this press release, whether as a
result of new information, future events or circumstances or
otherwise, except as may be required by applicable law.
Investor Contact:Elif McDonald
Senior Director, Investor Relations ir@theratech.com
438-315-8563
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