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BioCryst Announces Close of $30 Million Financing Transaction Related to Future RAPIACTA® Payments
News

BioCryst Announces Close of $30 Million Financing Transaction Related to Future RAPIACTA® Payments

BioCryst Announces Close of $30 Million Financing Transaction Related to Future RAPIACTA® Payments
News

BioCryst Announces Close of $30 Million Financing Transaction Related to Future RAPIACTA® Payments

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BioCryst intends to use its net proceeds received for general corporate purposes, primarily funding BioCryst's research and development efforts, including clinical development of BCX4208 and pre-clinical development programs.

“This non-dilutive financing significantly extends BioCryst’s cash runway and it provides additional financial flexibility as BioCryst advances its pipeline toward important clinical milestones and other potential value creating events.”

Stuart Grant, Senior Vice President and Chief Financial Officer of BioCryst Pharmaceuticals said, “This non-dilutive financing significantly extends BioCryst’s cash runway and it provides additional financial flexibility as BioCryst advances its pipeline toward important clinical milestones and other potential value creating events.”

Under the terms of the transaction, BioCryst transferred to JPR Royalty Sub LLC ("JPR"), a newly-formed wholly-owned subsidiary of BioCryst, certain rights under BioCryst's license agreement with Shionogi, including the right to receive royalty payments from commercial sales of RAPIACTA® and future milestone payments. As part of the transaction, BioCryst also transferred to JPR the right to receive payments under a new Japanese yen/U.S. dollar foreign currency hedge arrangement put into place by BioCryst in connection with the transaction. BioCryst's collaboration with Shionogi remains unchanged as a result of the transaction.

As part of the transaction, JPR issued $30 million in aggregate principal amount of its JPR PhaRMA Senior Secured 14% Notes due 2020 (the "Notes") in a private placement exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"). The Notes bear an interest rate of 14.0%, with interest payable annually on September 1st of each year, beginning September 1, 2011, and on the final legal maturity date. The royalty and milestone payments, if any, that JPR will be entitled to receive under the license agreement with Shionogi, together with any payments made under the currency hedge arrangement, will be the primary source of payment of principal of, and interest and any premium on, the Notes. The Notes are secured by a security interest granted by JPR in its rights to receive payments under the Shionogi license agreement and the currency hedge arrangement, all of its other assets and a pledge by BioCryst of its equity ownership interest in JPR. The Notes are non-callable prior to the first anniversary of today’s closing. After March 9, 2012, the Notes may be redeemed at any time prior to maturity, in whole or in part, at the option of JPR at specified redemption premiums.

The Notes have a final legal maturity of December 1, 2020. Under the terms of the Notes, when Shionogi payments, together with any payments made under the currency hedge arrangement, received by JPR exceed JPR’s ongoing expenses and the interest payments due annually on the Notes, the excess will be applied to the repayment of principal of the Notes until they have been paid in full. Accordingly, depending on payments from Shionogi, the Notes may fully amortize and be repaid prior to the final legal maturity date. BioCryst remains entitled to receive any royalties and milestone payments related to sales of RAPIACTA® following repayment of the Notes. The Notes constitute obligations of JPR, and are intended to be non-recourse to BioCryst except to the extent of BioCryst's pledge of its equity interest in JPR as part of the collateral securing the Notes. The Notes are not convertible into BioCryst's equity.

BioCryst received net proceeds of approximately $23 million from the transaction after transaction costs and establishment of a $3 million interest reserve account by JPR which will be available to help cover any interest shortfalls on the Notes through September 1, 2013.

The Notes have not been and will not be registered under the Securities Act, and may not be offered or sold in the United States absent an applicable exemption from the registration requirements of the Securities Act.

Morgan Stanley & Co. Incorporated acted as placement agent for the transaction.

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