Private placement pace thin; Pharming gets $100 million 12% four-year debt facility

Kansas City, Kan., May 16 – Private placement financing activity remained light on Tuesday, with Pharming Group NV among the few names reported in the market.

Pharming Group said it obtained a $100 million 12% four-year senior secured debt facility.

Pharming has signed an agreement with Orbimed Advisors for the facility “on improved commercial terms” with an overall coupon of about 12%, which will drop to 11% if the company achieves net sales in the United States of $100 million during the term of the loan, according to a company announcement.

Proceeds will be used “to refinance debt on more favorable terms to redeem a total of €35.9 million of amortizing convertible bonds and refinance $40 million of senior debt,” the release noted.

The loan has been used to redeem the current amortizing convertible bonds due 2017/2018 for an amount of €44.9 million including early repayment fees and also to refinance the existing senior debt facility for €43.3 million including early repayment fees.

As a result of the transaction, the company said its cash burn will be reduced by the likely amount of cash repayments under the amortizing convertible bonds in the rest of 2017 and in 2018, plus the amount of the cash repayments on the senior debt facility that start in December 2017 and continue through most of the loan period.

“We are delighted to announce that we have been able to improve the December 2016 funding of our Ruconest commercial rights acquisition further by refinancing the senior debt and redeeming the amortizing convertible bonds on such excellent terms,” Sijmen de Vries, chief executive officer of Pharming, said in the release.

Pharming Group is a biotechnology company based in Leiden, the Netherlands.

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