Coherus bolsters products launches with $300 million in financing

Chicago, Jan. 10 – Coherus BioSciences, Inc. set up financing to support the commercial launches of as many as five new products in 2022 and 2023 through $300 million in committed financing across four tranches from investment funds managed by Pharmakon Advisors, LP, according to a press release and an 8-K filing with the Securities and Exchange Commission filing.

The first tranche has already been drawn. The company drew $100 million at closing on Jan. 5 from a tranche A loan and used $81.9 million for the simultaneous repayment of the full balance outstanding under Coherus’ previous term loan with HealthCare Royalty Partners.

A second tranche for another $100 million from a tranche B loan is available until April 1. The second tranche is subject to the conversion, repayment, repurchase or redemption of the company’s 8.2% senior convertible notes due March 2022.

A third $50 million tranche C tranche is available subject to approval by the U.S. Food and Drug Administration of the biologics license application for Coherus’ PD-1 inhibitor, toripalimab, for nasopharyngeal carcinoma. The target action date is in April 2022.

A second $50 million tranche, tranche D, will available subject to approval by the FDA of the biologics license application for CHS-201, a Lucentis biosimilar candidate.

All of the borrowings (for all tranches) bear interest at Libor plus 825 basis points, with a 1% Libor floor.

The term loans have a five-year tenor from the anniversary of the closing date for the first tranche, or are subject to a springing maturity date if more than $50 million of the company’s 1.5% convertible senior subordinated notes due 2026 are outstanding on Oct. 1, 2025.

Repayment of the principal of the term loans will be made in five equal quarterly payments starting after the 48-month anniversary of the same closing date.

There is also a $100 million uncommitted additional facility amount.

There is a 200 bps funding fee.

Prepayment before the third anniversary is 300 bps, 200 bps from year three to year four and after year four any prepayment will have a 100 bps fee.

Before the second anniversary, there is also a make-whole fee equal to the forgone interest from the date of prepayment through the date of prepayment through the second anniversary.

Half of the funding is coming from BioPharma Credit Investments V (Master) LP and half from BPCR LP, as Pharmakon investment funds.

The clinical biologics platform company is based in Redwood City, Calif.

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