Strongbridge Biopharma plc Announces $30 Million Debt Facility with Avenue Venture Opportunities Fund, L.P.

DUBLIN, Ireland and TREVOSE, Pa., May 20, 2020 (GLOBE NEWSWIRE) -- Strongbridge Biopharma plc, (Nasdaq: SBBP), a global commercial-stage biopharmaceutical company focused on the development and commercialization of therapies for rare diseases with significant unmet needs, today announced that it and its subsidiaries have entered into a $30 million debt facility with Avenue Venture Opportunities Fund, L.P. (Avenue), a fund within the Avenue Capital Group, and its affiliates.

“This new debt facility flexibly increases our cash position at an attractive cost. We are pleased to be partnering with Avenue Venture Opportunities Fund, and we appreciate their overall confidence in our clinical development program for RECORLEV (levoketoconazole) and the commercial progress and potential of KEVEYIS (dichlorphenamide),” said John H. Johnson, executive chairman of Strongbridge Biopharma.

Under the terms of the loan agreement, Strongbridge U.S. Inc., a subsidiary of Strongbridge Biopharma plc, borrowed $10 million at closing. The debt facility also provides Strongbridge U.S. Inc., with two potential additional tranches of up to $10 million each. The first additional tranche is available between October 1, 2020 and December 31, 2020 if the Company achieves positive top-line data for RECORLEV in its Phase 3 LOGICS clinical trial. The second additional tranche is available between October 1, 2021 and March 31, 2022 if the Company achieves FDA approval of RECORLEV, subject to approval from Avenue’s investment committee. The debt facility has a four-year term, no minimum revenue or cash balance financial covenants and an interest-only period of up to 36 months assuming the Company achieves positive top-line data for RECORLEV in its Phase 3 LOGICS clinical trial and the Company receives FDA approval of RECORLEV. 

The Company believes that the new debt facility will extend its cash runway through the first quarter of 2022, which is at least two additional quarters beyond previous guidance.

Pursuant to the loan agreement, Strongbridge issued to Avenue warrants to purchase up to 267,390 ordinary shares of Strongbridge at a per share exercise price of the lower of (i) $1.87 (which is equal to the five-day volume weighted average price as of the trading day immediately prior to execution of the financing proposal), or (ii) the effective price of any bona fide equity financing prior to December 31, 2020. Avenue also has the right to convert up to $3 million of the principal outstanding of the loan into Strongbridge ordinary shares at a price per share of the lower of (a) $2.24, or (b) 20% above the effective price of any bona fide equity financing prior to December 31, 2020, subject to the terms and conditions described in the loan agreement.