On May 1, 2023 FibroGen, Inc. (NASDAQ: FGEN) reported a non-dilutive term loan facility with investment funds managed by Morgan Stanley Tactical Value (MSTV) that will result in proceeds to FibroGen of up to $150 million, bringing significant non-dilutive capital to support growth and innovation (Press release, FibroGen, MAY 1, 2023, View Source [SID1234630772]).
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The investment by this highly respected investor capitalizes on FibroGen’s significant accomplishments to date and adds a financial partner who is aligned with the company’s growth ambitions. The financing provides capital to advance pamrevlumab toward commercialization and to continue the development of our pre-clinical pipeline.
"With the current momentum across our development programs, this financing strengthens our balance sheet," said Enrique Conterno, Chief Executive Officer, FibroGen. "Part of the proceeds will be used to fund our wholly-owned pamrevlumab program as we anticipate five Phase 3 readouts to occur before mid-2024. In addition, this funding allows for the continued development of our early-stage pipeline."
The $150 million term loan facility will be available to the Company in three tranches:
The initial tranche of $75 million will be funded by May 8, 2023.
The second tranche of $37.5 million will be funded in the third quarter of 2023 upon achievement of certain clinical development milestones.
MSTV has the option to fund a third tranche of up to $37.5 million in the third quarter of 2023.
Borrowings under this three-year term loan facility will accrue interest at 14.0%. The outstanding principal amount of the term loan facility will be payable at maturity.
"We are pleased to extend this term loan facility to FibroGen in support of their continued growth," said Tom Cahill, Co-head of MSTV. "Roxadustat is a first-in-class chronic kidney disease anemia drug in approved markets and we are excited by the continued prospects in additional markets, the pamrevlumab program and the pipeline of other promising opportunities."
Morgan Stanley & Co. LLC acted as sole structuring agent to FibroGen on this transaction and Goodwin Procter LLP acted as counsel to FibroGen. Gibson, Dunn & Crutcher LLP acted as counsel to the investor.