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Sorrento Therapeutics Secures $75 Million Loan

Sorrento Therapeutics announced it has secured a loan of up to $75 million from Palo Alto-based Hercules Capital Inc.

The San Diego-based biopharmaceutical company said it will use loan proceeds for general corporate purposes, allowing it to consolidate programs and move forward with opportunities its products face in different areas of therapy.

“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 long term,” Executive Vice President and CFO Kevin Herde said in a Nov. 28 news release.

The loan comes in three parts, starting with $50 million Hercules provided Nov. 23 on the condition Sorrento first pay off debt to other lenders.

An additional $10 million is available until Sept. 30, 2017, and $15 million more can be tapped until June 30, 2018, pending approval by Hercules.

Sorrento is not required to accept the second and third batches of funding.

The term loan carries variable-rate interest currently set at 9.25 percent. It matures Dec. 1, 2020. Payments are to be interest-only until the first payment on principal comes due July 1, 2018, or Jan. 1, 2019 if Sorrento draws the second batch of $15 million.

Hercules Capital is a finance company specializing in lending to high-growth, innovative companies backed by venture capital.

Sorrento is a publicly traded, clinical-stage company developing antibody treatments for cancer, inflammation and autoimmune diseases.

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