By Devika Patel
Knoxville, Tenn., May 11 – Adamas Pharmaceuticals, Inc. said its subsidiary Adamas Pharma, LLC completed a $100 million private placement of 11% royalty-backed notes due December 2026 with HealthCare Royalty Partners III, LP.
The company will receive $35 million at closing and $65 million upon receiving U.S. Food and Drug Administration approval of ADS-5102 for treating levodopa-induced dyskinesia in people with Parkinson’s disease.
Interest and principal will be payable from the proceeds of a 12.5% royalty on U.S. net sales of ADS-5102 and up to $15 million of the company’s annual royalties from Allergan on U.S. net sales of Namzaric starting in May 2020.
Beginning in January 2021, the $15 million in annual company royalties from Allergan is payable at the rate of $3.75 million per quarter.
Adamas may prepay 200% of the principal, at which time no further payments will be due.
The royalty rate on net sales of ADS-5102 will drop to 6.25% after the principal amount of the note has been repaid, until Adamas has paid back 200% of the principal to HealthCare Royalty Partners.
Proceeds will be used for general corporate purposes, including to launch and commercialize ADS-5102.
The pharmaceutical company is based in Emeryville, Calif.
| Issuer: | Adamas Pharmaceuticals, Inc.
|
| Issue: | Royalty-backed notes
|
| Amount: | $100 million
|
| Maturity: | December 2026
|
| Coupon: | 11%
|
| Call feature: | At 200% of principal
|
| Investor: | HealthCare Royalty Partners III, LP
|
| Settlement date: | May 11
|
| Distribution: | Private placement
|
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