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Athyrium Capital Management Inks $125MM Credit Facility for Recro Pharma

March 04, 2019, 07:11 AM
Filed Under: Pharmaceuticals

Recro Pharma, Inc., a revenue generating specialty pharmaceutical company focused on therapeutics for hospitals and other acute care settings, 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 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.

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