ALX Oncology inks $100 million five-year loan and security agreement

By William Gullotti

Buffalo, N.Y., Oct. 31 – ALX Oncology Holdings Inc. signed a five-year, $100 million loan and security agreement with Oxford Finance LLC and Silicon Valley Bank on Oct. 27, according to an 8-K filing with the Securities and Exchange Commission.

The company received $10 million of the initial $50 million tranche at closing, with the remaining $40 million available through the end of 2023.

There is an additional $50 million available, divided into three tranches, with $12.5 million available in each of two tranches based upon the achievement of certain milestones. $25 million is available at the lenders’ discretion.

Each term loan will mature on Oct. 1, 2027, which will begin to amortize in equal monthly installments that begin Dec. 1, 2025. If a milestone-dependent tranche becomes funded, the amortization will be pushed back one year to Dec. 1, 2026.

Upon repayment or prepayment, the loans will not be able to be reborrowed.

The term loans will accrue interest at SOFR plus 625 basis points, subject to a floor of 8.58%.

Each term loan may be prepaid in full or in part, subject to minimum increments of $10 million. ALX will be responsible for a 3% fee on any prepayments made within the first year of funding. The fee will step down by 1% with each subsequent calendar year until zero. There is also a 6% fee incurred on the original principal amount of each loan upon funding, in addition to other customary fees for a loan facility of this size and type.

Borrowings are secured by substantially all of ALX’s assets, which will include intellectual property if the outstanding balance reaches or exceeds $75 million.

Proceeds will be used for working capital and to fund general business requirements.

Based in California and incorporated in Delaware, ALX is a clinical-stage immuno-oncology company.

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