Novocure, a global oncology company working to extend survival in some of the most aggressive forms of cancer, today announced the closing of a new $150 million senior secured revolving credit facility with JPMorgan Chase Bank, N.A. as administrative agent and a syndicate of three relationship banks. Novocure may, subject to certain conditions and limitations, increase the revolving credit commitments outstanding under the revolving credit facility or incur new incremental term loans in an aggregate principal amount not to exceed an additional $100 million. Together with our existing long-term debt, the facility provides Novocure with a flexible capital structure to advance near-term and long-term priorities in preparation for an anticipated period of significant innovation and growth.
“With readouts from key clinical trials in multiple indications anticipated over the next few years, we are actively working to ensure organizational readiness in anticipation of future growth,” stated William Doyle, Novocure’s Executive Chairman. “We believe the changes we’ve made to our capital structure coupled with the profitability of our existing commercial business position us well to sustain long-term growth and maximize shareholder value as we work to extend survival in some of the most aggressive forms of cancer.”
The obligations under the revolving credit facility are guaranteed by certain of our subsidiaries and secured by a first lien on our and certain of our subsidiaries’ assets. Outstanding loans will bear interest at a sliding scale based on our secured leverage ratio from LIBOR plus 2.75% to LIBOR plus 3.25% per annum. Additionally, the facility contains a fee for the unused revolving credit commitments at a sliding scale based on our secured leverage ratio from 0.35% to 0.45%. At closing, the Company had no outstanding balance borrowed under the facility.
“We believe recent financing transactions create financial flexibility in our capital structure to support ongoing investments intended to drive near-term growth and unlock future value at an extremely favorable cost of capital,” added Ashley Cordova, Novocure’s Chief Financial Officer. “Beyond investments in our clinical and product development programs, this growth capital enables us to strengthen our commercial footprint by expanding access to our approved indications into additional markets and to invest in pre-commercial and commercial activities associated with the potential for a simultaneous launch of multiple large indications.”