Axsome Therapeutics announced that its existing term loan facility agreement with Hercules Capital has been amended to increase the size of the facility to $300 million, and the amount immediately available upon U.S. Food and Drug Administration (FDA) approval of AXS-05 for major depressive disorder to $100 million, at the Company’s option. The amendment also extends the maturity and interest-only period of the facility.
“We are pleased with the amendment to our term loan facility, resulting in $100 million of non-dilutive capital immediately available upon the potential approval of AXS-05 and access to an additional $150 million thereafter,” said Herriot Tabuteau, MD, Chief Executive Officer of Axsome. “With improved financial terms, this committed capital further increases our financial flexibility through the anticipated commercial launches of AXS-05 for major depressive disorder and AXS-07 for migraine and will allow Axsome to accelerate access to these critical therapies for millions of patients in need.”
“Hercules is excited to expand its partnership with Axsome, which has two NDAs under review for AXS-05 in depression and AXS-07 in migraine, as it advances its differentiated pipeline and prepares for commercialization,” said Michael Dutra, Managing Director at Hercules Capital. “This substantial financial commitment from Hercules exemplifies our dynamic ability to customize financing solutions to support innovative life sciences companies, such as Axsome, through development and commercialization.”
Under the terms of the amendment, the size of the term loan facility was increased to $300 million from $225 million, and the amount available at the Company’s option immediately upon approval of AXS-05 in major depressive disorder was increased to $100 million from $35 million. An additional $150 million may be drawn at the Company’s option, in three separate tranches, consisting of $20 million upon approval of AXS-07 for migraine; $55 million upon achievement of certain combined sales and outstanding debt criteria; and, subject to the approval of Hercules Capital, $75 million to support future strategic initiatives, including further pipeline advancement or expansion. A total of $50 million was funded upon the initial closing. The amended term loan facility now bears interest at a calculated prime-based variable rate currently at 8.95% compared to the original 9.15%. The amendment extends the maturity date of the facility from the original October 2025 to October 2026, and optionally to October 2027, subject to certain conditions. The amendment also resets the interest-only payment period, and extends it from the initial 30 months from the original loan closing to at least 48 months from the amendment closing, and up to 60 months from the amendment closing based on approval of AXS-05 and AXS-07.