Xeris Biopharma Holdings entered into a senior secured term loan agreement with funds managed by Hayfin Capital Management to provide Xeris with up to a total of $150 million of capital.
Under the terms of the debt facility, Xeris drew down $100 million on the closing date to repay its existing term loan of $43.5 million with Oxford Finance LLC and Silicon Valley Bank, and the net proceeds will provide additional working capital to fund the Company’s business plan. An additional $50 million of the debt facility is available during the 12-month period following the closing date, which may be drawn by Xeris in up to three draws of no less than $10 million each, contingent upon, among other things, continued compliance with the financial covenants contained in the loan agreement. The maturity of the debt facility is five (5) years from the closing date, provided that such maturity date will be January 15, 2025 in the event that Xeris’ 5.0% outstanding convertible notes due 2025 are not extended, converted or refinanced prior to such date. Amounts borrowed under the debt facility bear interest at an annual rate equal to 9.00% plus the greater of (i) CME Term SOFR, subject to a credit spread adjustment, and (ii) one percent (1.00%) per annum. Xeris is entitled to make interest-only payments on a quarterly basis until the maturity date or earlier prepayment of the loan. During the term of the loan, Xeris is required to maintain certain minimum liquidity and revenue requirements.
On the closing date, Hayfin received warrants to purchase 1,315,789 shares of common stock of the Company at an exercise price of $2.28 per share, which will be exercisable until the seventh (7th) anniversary of the closing date.
“We are very pleased to be partnering with Hayfin. This debt facility increases our financial strength and provides us with substantial resources by securing access to non-dilutive capital on attractive terms without over encumbering our balance sheet,” said Steven Pieper, Xeris’ Chief Financial Officer. “Together with the recent equity financing, which closed in January, Xeris has now added approximately $80 million of cash to the greater than $102 million of cash and investments already on our balance sheet at year-end 2021.”
Pieper continued, “This capital base and, if needed, the additional $50 million available for the next 12 months, provides the Company with significant operating flexibility to drive our rapidly growing commercial business as currently constructed to cash flow breakeven by year-end 2023, and thereafter produce increasing operating cashflow.”
Andrew Merrill, Managing Director of Healthcare at Hayfin said, “We are pleased to be supporting Xeris Biopharma through this senior secured loan agreement. The transaction is a testament to Hayfin’s specialist coverage and extensive lending relationships in the healthcare sector that enable us to provide capital and help businesses, like Xeris, meet their commercial objectives.”
Evercore acted as sole financial advisor to Xeris on this transaction.