On January 20, 2021 AVEO Oncology (Nasdaq: AVEO) reported that it has received a commitment letter for an incremental $10 million loan from Hercules Capital, Inc. (NYSE: HTGC, "Hercules") and its affiliates, to be added to the current tranched, $35 million debt facility secured with Hercules in August 2020 through an amendment to the amended and restated loan and security agreement (the "Loan Agreement") (Press release, AVEO, JAN 20, 2021, View Source [SID1234574148]). Terms of the facility would remain otherwise unchanged from the Loan Agreement, with the loan bearing a maturity of 36 months, extendable up to 48 months, and an interest-only period of 12 months, extendable up to 30 months upon the achievement of performance milestones related to the approval and commercialization of tivozanib.
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Under the terms of the Loan Agreement, an initial tranche of $15 million was drawn down at signing. Under the terms of the commitment letter, a second tranche of $20 million would be available contingent upon the approval of the tivozanib New Drug Application ("NDA") by the U.S. Food and Drug Administration ("FDA") as a treatment for relapsed or refractory renal cell carcinoma ("RCC"). An additional $10 million will become available if certain sales criteria are met. As previously announced, the FDA has assigned AVEO’s NDA a Prescription Drug User Fee Act target action date of March 31, 2021. The nonbinding commitment letter is subject to AVEO and Hercules entering into a definitive amendment of the Loan Agreement setting forth the terms of the additional borrowing.
"The additional $10 million that would be made available from Hercules Capital with execution of a definitive amendment and the potential approval of tivozanib further supports what we believe will be a robust launch of tivozanib in the U.S.," said Michael Bailey, president and chief executive officer of AVEO. "As we work on expanding our commercial organization in preparation for this potential launch, we also continue to progress our pipeline of clinical programs, including our immunotherapy combination programs for tivozanib, our Phase 2 study of ficlatuzumab and our recently initiated Phase 1 study of AV-380. Throughout 2021, we look forward to a number of milestones designed to enhance our long-term value."
"We are pleased to be expanding our financing partnership with AVEO as they prepare for the potential approval and launch of tivozanib. This amendment and the potential further additional capital from Hercules represents another example of our unique ability to support innovative life sciences companies at all stages of development and through multiple value inflection points," said Bryan Jadot, Senior Managing Director and Life Sciences Group Head for Hercules.