scPharmaceuticals gets $100 million term loan in three tranches

By Wendy Van Sickle

Columbus, Ohio, Oct. 14 – scPharmaceuticals Inc. entered into a credit agreement for a four-year $100 million loan with Oaktree Fund Administration, LLC as administrative agent on Thursday, according to an 8-K filing with the Securities and Exchange Commission.

The term loan includes a $50 million tranche A that was funded at closing and $25 million tranche B that the company may borrow in up to two draws on or prior to Sept. 30, 2024 and a $25 million tranche C that the company may borrow on or before Dec. 31, 2024. Tranche B and C borrowings are subject to scPharmaceuticals’ achievement of some sales revenue milestones.

The maturity date is Oct. 13, 2027.

Borrowings bear interest at term SOFR plus a margin of 875 basis points with a 1% SOFR floor and a 3% SOFR cap.

From and after the company’s achieving $100 million in trailing 12-month net sales of Furoscix, the margin will drop to 825 bps.

For the first two years, the company may elect to pay up to 3% of interest in-kind. The company is also permitted to make quarterly interest-only payments through Dec. 31, 2025.

Beginning on March 31, 2026, the company will be required to make quarterly payments of interest, plus repay 5% of the outstanding principal of the term loan in quarterly installments until maturity; provided that, if the company’s auditors deliver a “going concern” or similar qualification or exception in respect of the company, it will be required to repay the term loan in four quarterly installments of 25% of the outstanding principal balance.

The company is obligated to pay the lenders an exit fee equal to 2% of the total amount of the term loan funded, due on the earliest to occur of the maturity date, the acceleration of the loan and the prepayment of the loan.

The company may voluntarily prepay the outstanding term loan, subject to a customary make-whole for the first two years and thereafter a prepayment premium equal to 3% of the principal amount of the term loan prepaid through the third anniversary of closing and 1% of the principal amount between the third and fourth anniversary of closing. There is no prepayment premium after the fourth anniversary of closing.

On the closing date, the company was required to issue to the lenders warrants to purchase 516,345 shares of the company’s common stock at an exercise price of $5.40. The warrants are immediately exercisable, and the exercise period will expire seven years from issuance.

Proceeds may be used to support commercialization of Furoscix, an injection for the treatment of congestion due to fluid overload in adult patients with chronic heart failure, and for other working capital and general corporate purposes.

The Burlington, Mass.-based pharmaceutical company develops new therapies and technology that extend the reach of subcutaneously-infused therapies to at-home care.

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