Provention Bio closes agreement for $125 million term loan

Chicago, Aug. 31 – Provention Bio, Inc. closed on a loan and security agreement with Hercules Capital, Inc. on Wednesday, according to an 8-K filing with the Securities and Exchange Commission.

The term loan provides up to $125 million, to be funded in five tranches.

The first $25 million was drawn at closing.

Upon approval of teplizumab, a second tranche of $40 million will be available. Teplizumab is a drug aimed at type 1 diabetes.

Subject to certain milestones, the third and fourth tranches will be available in an amount up to $35 million.

Subject to lender approval, there is a $25 million fifth tranche.

All of the term loans mature Sept. 1, 2026, with a possible one-year extension if certain milestones are met.

Interest-only payments will be made through Sept. 1, 2025.

Interest will be at the greater of the Prime rate plus 270 basis points and 8.2%. There was a $187,500 facility charge for the first tranche.

If the company opts for prepayment, it will be at 101 for the first 12 months, 101.5 for the next 12 months and at 101 if prepayment is after 24 months from the closing date.

The borrower is a biopharmaceutical company based in Red Bank, N.J.

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