Paratek obtains $60 million loan, will repay from royalties, sales

New York, Jan. 4 – Paratek Pharmaceuticals, Inc. entered into a $60 million non-recourse loan agreement with an affiliate of R-Bridge Healthcare Investment Advisory, according to a news release.

The loan has a maturity date 12 years from the date of execution and will be repaid using all proceeds of royalties from the company’s license and collaboration agreement with Zai Lab (Shanghai) Co., Ltd. and a 2.5% revenue interest from the company’s net U.S. sales of Nuzyra with an annual cap of $10 million.

Proceeds, together with cash on hand, were used to prepay in full the company’s loan with Hercules Capital, Inc.

Paratek said that the loan extends the repayment and amortization period by up to nine years compared to the Hercules debt.

Under certain circumstances, the revenue interest rate payable on the net U.S. sales of Nuzyra may increase up to 3.5% or 5% and the annual cap may increase to $12 million.

The loan can be repaid in full or part at any time at par.

In May 2020, Zai Lab announced that its new drug application for omadacycline for the treatment of community-acquired bacterial pneumonia and acute bacterial skin and skin structure infections had been accepted with priority review in China. Upon regulatory approval, anticipated in the first half of 2021, Paratek will receive a $6 million milestone payment. All milestone payments under the agreement with Zai Lab are excluded from loan agreement and will be retained by the company, according to the news release.

Paratek is a Boston-based biopharmaceutical company focused on the development and commercialization of novel life-saving therapies for life-threatening diseases or other public health threats for civilian, government and military use. Nuzyra is its lead commercial product. Rights in China are licensed to Zai Lab while Paratek retains them for the rest of the world.

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