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Hercules Capital Closes $75MM Credit Facility for Mesoblast

March 07, 2018, 07:00 AM
Filed Under: Medical

Mesoblast Limited announced that it has entered into a $75 million non-dilutive, four-year credit facility with Hercules Capital, Inc., a specialty finance company. 

Proceeds will be primarily used towards funding the commercialization of MSC-100-IV (remestemcel-L) after this product candidate successfully met its Phase 3 trial’s primary endpoint of Day 28 overall response in children with steroid refractory acute Graft versus Host Disease (aGVHD). 

The facility will also be used for the Company’s additional late stage product candidates: MPC-150-IM in patients with Class II/III advanced chronic heart failure, and in end-stage Class III/IV heart failure patients with left ventricular assist devices (LVADs), and MPC-06-ID in patients with chronic low back pain due to degenerative disc disease.

Mesoblast drew the first tranche of $35 million on closing. An additional $15 million may be drawn on or before Q4 CY2018, and a further $25 million may be drawn on or before Q3 CY2019, in each case as certain milestones are met.  Interest on the facility will accrue at a rate of 9.45% per annum with the interest only period lasting up to 30 months upon the satisfaction of certain conditions.

Mesoblast Chief Executive Dr Silviu Itescu stated: “This facility demonstrates the confidence Hercules Capital has in our compelling investment proposition. This credit facility enables us to progress our commercial plans for MSC-100-IV as it moves towards filing for regulatory approval in the United States for acute graft versus host disease. A stronger balance sheet will allow Mesoblast to focus on further business opportunities involving all of its Tier 1 product candidates in order to maximize shareholder value.”

Chief Investment Officer of Hercules Capital, Inc. Scott Bluestein said: “Hercules is pleased to enter into this financing partnership with Mesoblast at this important stage as it continues to advance its lead cell therapies targeting patients with significant unmet medical needs.  This investment in Mesoblast provides another example of our ability to finance life sciences companies through multiple stages of development and through various value inflection points.”

Cantor Fitzgerald & Co. acted as exclusive arranger and financial advisor to Mesoblast in this transaction.

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