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Depomed Secures $575MM Facility From Deerfield, Pharmakon Advisors

March 13, 2015, 07:21 AM
Filed Under: Pharmaceuticals

Depomed, Inc. has entered into a definitive agreement with Deerfield and Pharmakon Advisors, LP to borrow $575 million.  The proceeds of the loan will be used to fund the acquisition of the U.S. rights to the NUCYNTA franchise from Janssen Pharmaceuticals, Inc. which Depomed announced on January 15, 2015.  Upon signing the acquisition agreement in January, Depomed placed $500 million into escrow.  The escrowed amount and the proceeds of this loan will satisfy the $1.05 billion acquisition price and fees related to the transactions.

The loan will have a term of seven years, will be secured by Depomed's assets and will bear interest at the rate of 9.75% over three month LIBOR, with a floor of 1% and subject to certain caps. The loan can be prepaid under certain conditions and at Depomed's discretion any time after the second anniversary. $100 million of the facility may be paid down after one year.  The loan financing and the acquisition of NUCYTNA are subject to customary closing conditions, including HSR review.  Depomed now expects the loan financing and the acquisition to close in April 2015.

Depomed is a specialty pharmaceutical company that commercializes products for pain and neurology related disorders. 

Deerfield is an investment management firm committed to advancing healthcare through investment, information and philanthropy. 

Investment funds managed by Pharmakon Advisors have raised over $1 billion to provide financing to commercial stage companies in the biotech, specialty pharma, diagnostic and medical device industries.

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