Apellis Pharmaceuticals entered into a non-dilutive, senior secured credit facility with Sixth Street of up to $475 million, with approximately $375 million funded at close. Apellis can draw down an additional $100 million under the facility at the company’s option prior to September 2025, subject to satisfaction of certain conditions. Additionally, the Sixth Street agreement also permits Apellis to access $100 million through a separate third-party working capital facility.
Apellis used the majority of the net proceeds to buy out the existing SFJ Pharmaceuticals development liability for approximately $326 million. This buy out eliminates $366 million in payments owed to SFJ through 2027, including approximately $200 million through 2025. Net proceeds to Apellis at closing will be approximately $32 million following the buy out of the SFJ Pharmaceuticals development liability, and fees and expenses associated with the transaction.
“With this transaction, we believe we are uniquely positioned to fund our core operations to positive cash flow without the need to access the capital markets. This marks a pivotal milestone for Apellis,” said Tim Sullivan, chief financial officer of Apellis. “Sixth Street is one of the top capital providers within the life sciences sector. Executing this type of deal with market-leading economic terms underscores the quality of our business and the aligned confidence in the opportunities that we have to create meaningful, long-term shareholder value.”
“We are proud to be supporting Apellis as it successfully commercializes two life-changing medicines. We are particularly enthusiastic about SYFOVRE® (pegcetacoplan injection), which in its first year has already helped many people living with geographic atrophy in the U.S. and has the potential to benefit millions of patients worldwide,” said Jeff Pootoolal, partner at Sixth Street. “We greatly value our partnership with the Apellis team and look forward to continuing to help them drive further growth and to realize their commercial and development goals.”
The new senior secured credit facility matures on May 13, 2030, and bears interest at an annual rate equal to the 3-month Secured Overnight Financing Rate (SOFR) + 5.75% (subject to 1.00% floor), with certain additional fees and prepayment terms. There are no scheduled amortization payments during the term of the facility, with all principal due on the maturity date. The credit facility obligations are secured by substantially all assets of Apellis, and the credit facility includes certain affirmative and negative covenants consistent with a facility of this type.
As of March 31, 2024, Apellis had cash and cash equivalents of $325.9 million.
TD Cowen acted as financial advisor and Wilmer Hale served as legal advisor to Apellis. Proskauer Rose LLP acted as legal advisors to Sixth Street.