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CRG Commits $881MM of New Capital to Healthcare Investments Over 12 Months

November 30, 2017, 07:00 AM
Filed Under: Industry News

CRG, a healthcare-focused investment firm, announced cumulative financing commitments of $881 million in 11 new commercial-stage healthcare investments over the last 12 months. In addition, the firm generated realizations from eight portfolio company liquidity events during the same 12-month period, including M&A transactions and refinancing activities, resulting in a total of more than $425 million in proceeds to CRG and its institutional partners.

“We continue to selectively deploy the capital of our latest fund in commercial-stage healthcare companies, which are launching products and services aimed at improving healthcare in the US and abroad,” said Nate Hukill, President of CRG. “Further, we underwrote larger transactions for more mature companies with average initial commitments increasing by 137 percent over the last five years. Finally, several of our portfolio companies experienced positive catalysts, resulting in significant realizations for our institutional partners. These exits represent the culmination of great partnerships with our portfolio companies and reinforce the opportunity to create value for equity shareholders by utilizing debt capital from CRG to propel growth and achieve great outcomes.”
CRG increased its average initial commitment size per investment to $83 million in 2017, a 14 percent increase since 2016 and an 89 percent increase since 2014. Recent new investment commitments to highlight include:

  • Synergy Pharmaceuticals (Nasdaq: SGYP) – A biopharmaceutical company focused on the development and commercialization of novel gastroenterology therapies completed a $300 million debt commitment and CRG funded an initial tranche of $100 million in September 2017. The investment provided non-dilutive capital with a long-term structure that offered an attractive alternative to traditional equity linked financings.
  • BioDelivery Sciences International (Nasdaq: BDSI) – A specialty pharmaceutical company, with a focus in the areas of pain management and addiction medicine, entered into a $75 million senior credit facility with CRG. The facility consists of $45 million drawn at closing and the ability to access additional funding of up to $30 million in two tranches based on the achievement of certain milestones. The investment provided the company with a significant amount of non-dilutive capital at a time when they believed their equity was undervalued.
  • Strongbridge Biopharma (Nasdaq: SBBP) – A global commercial-stage biopharmaceutical company focused on the development and commercialization of therapies for rare and orphan diseases with significant unmet needs signed a $50 million senior credit facility with CRG to raise capital and refinance an existing short-term venture debt facility. In addition, CRG invested $3 million in the company’s common equity. The investment provided sufficient resources to launch their commercial product.
  • T2 Biosystems (Nasdaq: TTOO) – A tools & diagnostics company developing innovative products that provide a significant cost benefit for the treatment of sepsis, one of the most expensive conditions to treat in the healthcare system. T2 Biosystems is an emerging leader in the field of in vitro diagnostics, with two FDA-approved products, that has the ability to provide test results faster than any competitor on the market today. The company is also developing their technology for lyme disease and hemostasis profiling. CRG’s $50 million investment provided the company with the long-term flexibility to effectively commercialize their products in the market.

Other recent CRG financings include investments in CleanSlate Addiction Treatment Centers, Earlens, MDLIVE, Viveve Medical, Advanced ICU, Intrinsic Therapeutics and Endoceutics. Regarding exits, CRG experienced significant momentum recognizing eight realizations of portfolio company investments. In October 2017, Neotract was acquired by Teleflex (NYSE: TFX) in a transaction valued at $1.1 billion.
Luke Düster, Managing Director at CRG, added, “We have diversified our team’s investment experience, having partnered with more than 45 companies across the healthcare spectrum, including pharmaceutical, medical device, tools & diagnostics, healthcare services and healthcare IT companies, all geared towards improving healthcare outcomes and often at lower costs to the healthcare system. As we look forward to 2018, we remain focused on supporting our existing portfolio companies with additional growth capital and working with new partners that are bringing innovative products and services to market.”

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