Recro Pharma Obtains $40.5 Million of Non-Dilutive Capital Through Expanded Credit Facility
Credit Facility with Athyrium Expanded to $125 Million
MALVERN, Pa., March 04, 2019 (GLOBE NEWSWIRE) -- Recro Pharma, Inc. (NASDAQ:REPH), a revenue generating specialty pharmaceutical company focused on therapeutics for hospitals and other acute care settings, today announced that it has closed on an amended and expanded $125 million credit facility with investment funds managed by Athyrium Capital Management, LP (Athyrium), a leading healthcare-focused investment firm. The increased financial flexibility created by this non-dilutive funding will strengthen the Company’s balance sheet and support the Company’s plans to commercialize its lead drug candidate, intravenous (IV) meloxicam, which is currently under review by the U.S. Food and Drug Administration (FDA), while the Company is awaiting its assigned PDUFA goal date of March 24, 2019.
The prior $100 million credit facility, under which Recro had drawn $70 million, required various conditions to draw the remaining $30 million of available capital. This amendment substantially increases and fully funds the capital under the expanded $125 million credit facility, providing immediately available net proceeds of $40.5 million upon closing. Among other items, this amendment resets the fee structure in a non-dilutive manner with no warrants or equity being issued and extends the maturity date to March 31, 2023, while maintaining an interest rate of LIBOR plus 9.75% per annum.
“Following a debt process evaluating non-dilutive financing options, Athyrium was selected for a credit refinancing transaction,” said Gerri Henwood, President and Chief Executive Officer of Recro Pharma. “We are happy to have the continued support and confidence of Athyrium, a premier partner known for its strategic investments in promising healthcare companies and assets. The increased commitment from Athyrium prior to the upcoming PDUFA goal date of March 24, 2019 provides important non-dilutive capital and additional financial flexibility as we anticipate becoming a commercial-stage enterprise and prepare for the potential launch of IV meloxicam.”
Jeffrey Ferrell, Managing Partner at Athyrium, stated: “We are pleased with the stability and growth of the CDMO business since our original commitment. Recro has matured its business development efforts and continued to build and strengthen its customer relationships, as recently evidenced by the new exclusive five-year manufacturing and supply agreement with Novartis Pharma AG. Recro management continues to execute on various strategic initiatives and we look forward to continuing our strong partnership with Recro as they build their non-opioid acute care franchise.”
JMP Securities acted as exclusive financial advisor and sole placement agent to Recro on this transaction.
Further information regarding this credit facility and the refinancing are set forth in the Form 8K filed by the Company with the Securities and Exchange Commission on March 4, 2019.
About Recro Pharma, Inc.
Recro Pharma is a specialty pharmaceutical company that operates through two business divisions, an Acute Care, hospital product division and a revenue-generating contract development and manufacturing, or CDMO, division, located in Gainesville, GA. The Acute Care division is primarily focused on developing innovative products for the hospital and other acute care settings. The Company’s lead product candidate is a proprietary injectable form of meloxicam, a long-acting preferential COX-2 inhibitor. IV meloxicam has successfully completed two pivotal Phase III clinical efficacy trials, a large double-blind placebo-controlled Phase III safety trial and four Phase II clinical efficacy trials, as well as other safety studies. Recro’s Complete Response to the CRL for IV meloxicam was accepted for filing by the FDA in early October 2018 and assigned a PDUFA date of March 24, 2019. As injectable meloxicam is in the non-opioid class of drugs, if approved, the Company believes it has the potential to overcome many of the issues associated with commonly prescribed opioid therapeutics, including respiratory depression, constipation, excessive nausea and vomiting, as well as having no addictive potential while maintaining meaningful analgesic effects for relief of pain. The Company’s CDMO division leverages its formulation expertise to develop and manufacture pharmaceutical products using its proprietary delivery technologies and other manufacturing services for commercial and development-stage partners who commercialize or plan to commercialize these products. These collaborations can result in revenue streams including royalties, profit sharing, research and development and manufacturing fees, which support continued operations for its CDMO division, and it contributes non-dilutive funding for the development and pre-commercialization activities of its Acute Care division.
About Athyrium Capital Management
Athyrium is a specialized asset management company formed in 2008 to focus on investment opportunities in the global healthcare sector. Athyrium advises funds with over $3.7 billion in committed capital. The Athyrium team has substantial investment experience across a wide range of asset classes including public equity, private equity, fixed income, royalties, and other structured securities. Athyrium invests across all healthcare verticals including biopharma, medical devices and products, healthcare focused services, and healthcare information technology. The team partners with management teams to implement creative financing solutions to companies’ capital needs. For more information, please visit www.athyrium.com.
Cautionary Statement Regarding Forward Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. Such forward-looking statements reflect Recro's expectations about its future performance and opportunities that involve substantial risks and uncertainties. When used herein, the words "anticipate," "believe," "estimate," "may," "upcoming," "plan," "target," "intend" and "expect" and similar expressions, as they relate to Recro or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information available to Recro as of the date of this press release and are subject to a number of risks, uncertainties, and other factors that could cause Recro’s performance to differ materially from those expressed in, or implied by, these forward-looking statements. Recro assumes no obligation to update any such forward-looking statements. Factors that could cause Recro’s actual performance to materially differ from those expressed in the forward-looking statements set forth in this press release include, without limitation: the Company’s ability to resolve the deficiencies identified by the FDA in the CRL for IV meloxicam; whether the FDA will approve the Company’s amended NDA for IV meloxicam and, if approved, the labeling under any such approval; if the FDA does not approve the Company’s amended NDA, the time frame otherwise associated with resolving the deficiencies identified by the FDA in the CRL and whether the FDA will require additional clinical studies to support the approval of IV meloxicam and the time and cost of such studies; the Company’s ability to successfully launch and commercialize IV meloxicam, if approved; the length, cost and uncertain results and timing of the Company’s clinical trials, including the Company’s Phase IIIb clinical trials and any additional clinical trials that the FDA may require in connection with IV meloxicam; the extent to which IV meloxicam, if approved, is accepted by the medical community, including physicians, patients, health care providers and hospital formularies; the availability of coverage and adequate and timely reimbursement for IV meloxicam, if approved; the Company’s ability to raise future financing for continued product development, IV meloxicam commercialization and the payment of milestones; the Company’s ability to achieve its financial goals, including financial guidance; the Company’s ability to pay its debt under its credit agreement; regulatory developments in the United States and foreign countries; customer product performance and ordering patterns, the performance of third-party suppliers and manufacturers; the Company’s ability to maintain relationships with CDMO commercial partners; and the Company’s ability to obtain, maintain and successfully enforce adequate patent and other intellectual property protection. In particular, there can be no assurance that the FDA will complete its review by the PDUFA goal date, that the FDA will not require changes or additional data with respect to the amended NDA or that the FDA will approve the amended NDA. The forward-looking statements in this press release should be considered together with the risks and uncertainties that may affect Recro’s business and future results included in Recro’s filings with the Securities and Exchange Commission at www.sec.gov.
Investor Relations Contact:
Recro Pharma, Inc.
Ryan D. Lake
Released March 4, 2019