Calliditas refinances existing term loan with Euro 92 million senior secured facility with Athyrium Capital
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The strategic financial maneuver by Calliditas Therapeutics to refinance its existing debt with a larger, four-year term loan from Athyrium Capital Management is a significant move that merits close scrutiny. By opting for a refinancing solution, the company has effectively extended its interest-only payment period by an additional three years, which could alleviate short-term cash flow pressures and provide more flexibility in its operational budgeting.
From a financial perspective, the fixed interest rate of 9.00% remains constant despite the increased principal, indicating a stable cost of capital which is vital for forecasting and long-term planning. The arrangement also includes a prepayment option, offering Calliditas the flexibility to manage its debt more aggressively should it find itself in a position of increased liquidity ahead of schedule.
The financial covenants embedded within the credit agreement, stipulating minimum cash liquidity and product revenue, are typical of such loan structures and serve as safeguards for the lender while also enforcing fiscal discipline on the borrower. Investors should monitor these covenants as they can be indicative of the company's ongoing financial health and operational performance.
Calliditas Therapeutics' refinancing move comes on the heels of full FDA approval for TARPEYO®, which is expected to bolster the company's commercialization efforts in the U.S. market. The Notice of Allowance for a second TARPEYO patent further strengthens the company's intellectual property portfolio, potentially extending market exclusivity and creating barriers to entry for competitors.
The company's strategic focus on non-dilutive capital signifies an intent to preserve shareholder value while still securing the necessary funds for expansion. This could be well-received in the market, as it suggests confidence in the company's revenue-generating capabilities and a commitment to avoiding shareholder dilution.
However, the high fixed interest rate of 9.00% compared to average corporate debt could reflect the perceived risk associated with the investment or a premium for the flexibility provided by the loan terms. Stakeholders should consider the impact of this interest rate on the company's long-term cost structure and profit margins.
The pharmaceutical industry is capital-intensive, with significant funds required not only for research and development but also for the commercialization of approved drugs. Calliditas' decision to prioritize the repayment of its existing loan and secure additional capital reflects an understanding of the industry's economics and the necessity of having a robust financial foundation to support product launches and market penetration.
The full FDA approval of TARPEYO® represents a critical milestone for Calliditas, likely increasing investor confidence and potentially improving the company’s bargaining power in future financial negotiations. The timing of this refinancing could be seen as a strategic move to capitalize on the positive regulatory momentum.
It is essential to consider the competitive landscape and reimbursement environment for TARPEYO® in the U.S., as these factors will significantly influence the product's commercial success and, by extension, the company's ability to meet the financial covenants of the new loan agreement.
With this refinancing, the company extends the interest-only period on its debt by three years at the same interest rate as the previous term loan. The principal amount of the new loan is
"Signing this four-year term loan facility ensures an extension and expansion of our access to significant non-dilutive capital. With the full FDA approval of TARPEYO®, the recent issuance of a Notice of Allowance of a second TARPEYO patent and extension of debt repayment by 3 years, we believe that Calliditas is well positioned to continue to create value through direct commercialisation efforts in
"We are thrilled to help contribute to the continued commercial success of TARPEYO® and its recent full FDA approval in the
The credit agreement provides for quarterly interest-only payments through the third quarter of 2026. The loan will partially amortize in four quarterly principal payments of
Bryan, Garnier & Co. acted as sole financial advisor to Calliditas in this transaction.
For further information, please contact:
Åsa Hillsten, Head of IR & Sustainability, Calliditas
Tel.: +46 76 403 35 43, Email: asa.hillsten@calliditas.com
The information in the press release is information that Calliditas is obliged to make public pursuant to the EU Market Abuse Regulation. The information was sent for publication, through the agency of the contact persons set out above, on December 27, 2023 at 5:45 p.m. CET.
About Calliditas
Calliditas Therapeutics is a biopharma company headquartered in
Calliditas' common shares are listed on Nasdaq Stockholm (ticker: CALTX) and its American Depositary Shares are listed on the Nasdaq Global Select Market (ticker: CALT). Visit Calliditas.com for further information.
About Athyrium Capital Management
Athyrium is a specialized asset management company formed in 2008 to focus on investment opportunities in the global healthcare sector. Athyrium advises funds with over
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including, without limitation, statements regarding Calliditas' financing plans and the development of its pipeline, as well as the anticipated use of proceeds of the term loan. The words "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "project," "potential," "continue," "target," and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any forward-looking statements in this press release are based on management's current expectations and beliefs and are subject to a number of risks, uncertainties, and important factors that may cause actual events or results to differ materially from those expressed or implied by any forward-looking statements contained in this press release, including, without limitation, any related to Calliditas' business, operations, clinical trials, intellectual property of the NEFECON franchise globally, competition from other companies, pipeline development, revenue and product sales projections or forecasts and other risks identified in the section entitled "Risk Factors" in Calliditas' reports filed with the Securities and Exchange Commission. Calliditas cautions you not to place undue reliance on any forward-looking statements, which speak only as of the date they are made. Calliditas disclaims any obligation to publicly update or revise any such statements to reflect any change in expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements. Any forward-looking statements contained in this press release represent Calliditas' views only as of the date hereof and should not be relied upon as representing its views as of any subsequent date.
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