RedHill Biopharma Enters $115 Million Non-Dilutive Financing Agreement with HealthCare Royalty Partners

RedHill to receive $30 million following closing to support its commercial operations, including the planned launch of Talicia this quarter and the ongoing promotion of Aemcolo

RedHill will receive an additional $50 million to fund the acquisition of rights to Movantik from AstraZeneca pursuant to a transaction announced today

Two additional tranches totaling $35 million will be available to further support RedHill’s commercial operations and provide additional financing for the Movantik acquisition

TEL-AVIV, Israel and RALEIGH, N.C., Feb. 25, 2020 (GLOBE NEWSWIRE) -- RedHill Biopharma Ltd. (Nasdaq: RDHL) (“RedHill” or the “Company”), a specialty biopharmaceutical company primarily focused on the commercialization and development of proprietary drugs for the treatment of gastrointestinal diseases, today announced that it has entered into a non-dilutive, royalty-backed term loan agreement with HealthCare Royalty Partners (“HCR”) pursuant to which HCR has committed up to $115 million to support RedHill’s U.S. commercial operations.

“This non-dilutive financing will support the acquisition of rights to Movantik from AstraZeneca, the planned U.S. launch of Talicia this quarter and the ongoing promotion of Aemcolo,” said Micha Ben Chorin, RedHill’s Chief Financial Officer. “We would like to thank HCR for their confidence and support and look forward to a fruitful partnership.”

Clarke Futch, Managing Partner at HCR, stated: “Over the past several years RedHill has methodically built an organization that is ready to become a leader in the GI space, through the commercialization of its existing products as well as the strategic acquisition of additional products. HCR is very excited to partner with RedHill as it looks to fund its growth.”

Paul Hadden, Partner at HCR, based in London, added: “Recognizing that the United States is an important market for most biopharma companies, HCR is pleased to be able to provide value added support to its partners as they look to grow in the U.S. market. We are strong believers in the prospects for RedHill’s future and look forward to supporting the launch of Talicia, the ongoing promotion of Aemcolo, and the acquisition of Movantik.” 

Under the terms of the agreement, RedHill will receive $30 million following the closing to support RedHill’s commercial operations, including the planned U.S. launch of Talicia¹ this quarter and the ongoing promotion of Aemcolo². Subject to satisfaction of certain customary conditions, RedHill will receive an additional $50 million to fund the acquisition of rights to Movantik (naloxegol)³, a peripherally acting mu-opioid receptor antagonist (PAMORA) indicated for the treatment of opioid-induced constipation (OIC), from AstraZeneca pursuant to the transaction announced today. Two additional tranches, the second of which is at the mutual agreement of RedHill and HCR, totaling $35 million will be available upon satisfaction of certain conditions to further support RedHill’s growing commercial operations. HCR will receive royalties in the low-single digits based on RedHill’s worldwide net revenues, subject to a cap, as well as interest on the outstanding term loan to be computed as the 3-month LIBOR rate plus a single-digit interest rate, depending on revenues generated. The term loan matures in six years with no principal amortization payments required in the first three years. The loan can be prepaid at RedHill’s discretion, subject to customary prepayment fees, certain of which decrease over time.