Humanigen Announces $80 Million Loan Facility from Hercules Capital

Rhea-AI Summary

Humanigen, a clinical-stage biopharmaceutical company, has secured a term loan facility of up to $80 million from Hercules Capital to support the production of its lead drug candidate, lenzilumab. The facility includes a $25 million initial term loan and an additional $55 million contingent on achieving milestones. This financing aims to bolster Humanigen's balance sheet and prepare for the potential Emergency Use Authorization of lenzilumab in 2021, enhancing financial flexibility amidst ongoing COVID-19 treatment development.

Positive

• Secured a term loan facility of up to $80 million, enhancing financial flexibility.
• Initial $25 million loan aids working capital for lenzilumab production.
• Additional $55 million available upon meeting specific milestones.

Negative

• Dependence on achieving milestones for additional loan draws.
• Risks related to the Phase 3 clinical trial outcomes for lenzilumab.

Humanigen, Inc. (Nasdaq: HGEN) (“Humanigen”), a clinical stage biopharmaceutical company focused on preventing and treating an immune hyper-response called ‘cytokine storm’ with its lead drug candidate, lenzilumab™, has obtained a term loan facility from Hercules Capital (NYSE: HTGC), a leader in customizing debt financing for companies in the life sciences market. Under the terms of the facility, Hercules will provide Humanigen up to $80 million of secured debt financing.

“The term loan facility provides working capital to support the production of lenzilumab, strengthens our balance sheet and increases our financial flexibility as we prepare for the potential Emergency Use Authorization and commercial launch of lenzilumab in 2021,” said Cameron Durrant, MD, MBA, Chief Executive Officer, Humanigen.

The facility consists of a $25 million initial term loan, with up to an additional $55.0 million available for future draws subject to achievement of future milestones and satisfaction of other conditions. The facility provides for an interest-only period and the four-year term is extendable under certain conditions. Loans under the facility are secured by the company’s assets.

"Hercules is excited to be partnering with Humanigen as it advances lenzilumab for COVID-19 and other indications. This structured financing represents a significant commitment from Hercules, which is consistent with our goal of supporting innovative life sciences companies,” said Himani Bhalla, Principal at the Life Sciences group at Hercules. “This is an example of the breadth of our platform and our ability to finance life sciences companies through all stages of development.”

About Humanigen, Inc.

Humanigen, Inc. is developing its portfolio of clinical and pre-clinical therapies for the treatment of cancers and infectious diseases via its novel, cutting-edge GM-CSF neutralization, and gene-knockout platforms. Humanigen believes that its GM-CSF neutralization and gene-editing platform technologies have the potential to reduce the inflammatory cascade associated with coronavirus infection. Humanigen’s immediate focus is to prevent or minimize the cytokine release syndrome that precedes severe lung dysfunction and ARDS in serious cases of SARS-CoV-2 infection. Humanigen is also focused on creating next-generation combinatory gene-edited CAR-T therapies using strategies to improve efficacy while employing GM-CSF gene knockout technologies to control toxicity. In addition, Humanigen is developing its own portfolio of proprietary first-in-class EphA3-CAR-T for various solid cancers and EMR1-CAR-T for various eosinophilic disorders. Humanigen is also exploring the effectiveness of its GM-CSF neutralization technologies (either through the use of lenzilumab as a neutralizing antibody or through GM-CSF gene knockout) in combination with other CAR-T, bispecific or natural killer (NK) T cell engaging immunotherapy treatments to break the efficacy/toxicity linkage, including to prevent and/or treat graft-versus-host disease (GvHD) in patients undergoing allogeneic hematopoietic stem cell transplantation (HSCT). Additionally, Humanigen and Kite, a Gilead Company, are evaluating lenzilumab in combination with Yescarta® (axicabtagene ciloleucel) in patients with relapsed or refractory large B-cell lymphoma in a clinical collaboration. For more information, visit www.humanigen.com and follow Humanigen on LinkedIn, Twitter and Facebook.

Humanigen Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements reflect management's current knowledge, assumptions, judgment and expectations regarding future performance or events. Although Humanigen management believes that the expectations reflected in such statements are reasonable, they give no assurance that such expectations will prove to be correct and you should be aware that actual events or results may differ materially from those contained in the forward-looking statements. Words such as "will," "expect," "intend," "plan," "potential," "possible," "goals," "accelerate," "continue," and similar expressions identify forward-looking statements, including, without limitation, statements regarding the availability under the term loan and statements regarding Humanigen’s beliefs relating to the technologies in Humanigen’s current pipeline. These forward-looking statements are subject to a number of risks and uncertainties including, but not limited to, the timing and results of the Phase 3 clinical trial of lenzilumab; risks inherent in Humanigen’s lack of profitability and need for additional capital to grow Humanigen’s business; Humanigen’s dependence on partners to further the development of Humanigen’s product candidates; the uncertainties inherent in the development, attainment of the requisite regulatory approvals or authorization for emergency or broader patient use for the product candidate and launch of any new pharmaceutical product; the outcome of pending or future litigation; and the various risks and uncertainties described in the "Risk Factors" sections and elsewhere in the Humanigen's periodic and other filings with the Securities and Exchange Commission.

All forward-looking statements are expressly qualified in their entirety by this cautionary notice. You should not place undue reliance on any forward-looking statements, which speak only as of the date of this release. Humanigen undertakes no obligation to revise or update any forward-looking statements made in this press release to reflect events or circumstances after the date hereof or to reflect new information or the occurrence of unanticipated events, except as required by law.

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FAQ

What is the term loan facility announced by Humanigen?

Humanigen announced a term loan facility from Hercules Capital of up to $80 million to support the production of lenzilumab.

How much initial funding did Humanigen receive?

Humanigen received an initial term loan of $25 million under the new facility.

What are the potential future draws from Humanigen's loan?

Humanigen can access an additional $55 million subject to the achievement of future milestones.

What is lenzilumab used for?

Lenzilumab is Humanigen's lead drug candidate aimed at treating cytokine storms associated with COVID-19.

What are the risks mentioned in Humanigen's press release?

The risks include outcomes of the Phase 3 clinical trial and the need for additional capital to grow their business.