Tricida Announces $125 Million Debt Facility with Hercules Capital

Rhea-AI Summary

Tricida, Inc. (NASDAQ: TCDA) announced a $125 million debt facility with Hercules Capital, Inc. (NYSE: HTGC). Of this, $100 million is available for Tricida upon meeting certain milestones. This financing aims to support the upcoming NDA resubmission and FDA approval for their drug, veverimer, designed to treat chronic kidney disease (CKD). The loan allows for interest-only payments until August 2024, with possible extensions based on FDA decisions. This partnership is intended to provide non-dilutive capital for Tricida's ongoing development of veverimer.

Positive

• Secured a $125 million debt facility with Hercules Capital, providing financial flexibility.
• Potential to access $100 million for development upon meeting specific milestones.
• Aims to support NDA resubmission and FDA approval for veverimer, targeting CKD treatment.

Negative

• Debt repayments may impact financial stability long-term.
• Interest rates are high, potentially affecting future cash flows.

SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)-- Tricida, Inc. (Nasdaq: TCDA) announced today that it has entered into a debt facility with Hercules Capital, Inc. (NYSE: HTGC), a leader in customizing debt financing for companies in the life sciences and technology-related markets. The total amount of the debt facility is $125 million of which $100 million will be available for drawdown at Tricida’s option subject to the achievement of certain milestones.

“As we prepare to report the topline results from the VALOR-CKD renal outcomes trial this month, we want to ensure we are positioned both financially and strategically to move toward a potential NDA resubmission, potential FDA approval and subsequent commercialization of veverimer,” said Geoff Parker, Chief Operating Officer and Chief Financial Officer of Tricida. “This debt facility provides us with additional flexibility in our future financing plans.”

Under the terms of the debt facility, $25 million will be available for drawdown until December 31, 2022, subject to the announcement of positive data from the VALOR-CKD trial. An additional $25 million will be available for drawdown until the earlier of ten business days following the filing of the NDA for veverimer and September 15, 2023. An additional $50 million will be available for drawdown until the earlier of ten business days following the FDA approval of veverimer and February 15, 2024. An additional $25 million may be available for drawdown through December 15, 2024, subject to the approval of the Hercules investment committee.

Under the Loan Agreement, the loans bear interest at a floating per annum interest rate equal to the greater of either 8.75% or the lesser of 8.75% plus the prime rate as reported in The Wall Street Journal minus 6.25% and 10.25%.

The loan repayment schedule provides for interest only payments until August 1, 2024. The interest only period date may be deferred to November 1, 2026, following the FDA approval of veverimer. The final maturity date for the Loan Agreement is November 1, 2025. Subject to meeting certain conditions the final maturity date may be extended up to an additional two years.

“Hercules is pleased to enter into this financing partnership with Tricida at this important stage as it continues to advance veverimer to address a significant unmet medical need,” said Scott Bluestein, Chief Executive Officer and Chief Investment Officer of Hercules. “This structured investment in Tricida provides the Company with additional non-dilutive capital as it continues to develop veverimer, which has the potential to address a significant unmet medical need in the treatment of patients with metabolic acidosis and CKD. We are excited to once again be partnering with the Tricida management team.”

About Tricida

Tricida, Inc. is a pharmaceutical company focused on the development and commercialization of its investigational drug candidate, veverimer, a non-absorbed, orally-administered polymer designed to slow CKD progression in patients with metabolic acidosis and CKD. Tricida has recently completed a renal outcomes clinical trial, VALOR-CKD, to determine if veverimer slows CKD progression in patients with metabolic acidosis associated with CKD. Metabolic acidosis is a condition commonly caused by CKD that is believed to accelerate the progression of kidney deterioration. It is estimated to pose a health risk to approximately 4.3 million patients with CKD in the United States. There are currently no therapies approved by the FDA to slow progression of kidney disease by correcting chronic metabolic acidosis in patients with CKD.

For more information about Tricida, please visit Tricida.com.

Cautionary Note on Forward-Looking Statements

This press release includes forward-looking statements, including for example, statements concerning the Company’s plans and expectations for the estimated timing for receipt of top-line data from the VALOR-CKD trial and the potential for resubmission of an NDA for veverimer, the potential FDA approval of veverimer, if at all, the potential commercialization of veverimer, and as well as its expectations regarding future financial needs. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those discussed in such forward-looking statements. Such risks and uncertainties include, without limitation, risks related to the ability of the VALOR-CKD trial to achieve its primary endpoint and for data from that trial to be sufficient to support NDA resubmission and/or approval; the time and cost necessary to obtain regulatory approvals for veverimer; Tricida’s ability to obtain approval for veverimer through the traditional approval process; the costs associated with the delays in regulatory approval and resubmission of Tricida’s NDA, and any increased costs associated with raising capital in light of such delays; and risks associated with the Company’s business prospects, financial results and business operations.

These and other factors that may affect the Company’s future results of operations are identified and described in more detail in our filings with the Securities and Exchange Commission (the “SEC”). You should not place undue reliance on these forward-looking statements. The forward-looking statements contained in this press release reflect Tricida’s current views with respect to future events, and Tricida does not undertake and specifically disclaims any obligation to update any forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221019005999/en/

Jackie Cossmon, IRC

Tricida, Inc.

Senior Vice President of Investor Relations and Communications

IR@Tricida.com

Source: Tricida, Inc.

FAQ

What is the significance of Tricida's debt facility with Hercules Capital?

Tricida's $125 million debt facility with Hercules Capital is crucial for funding the development and potential commercialization of their drug, veverimer, targeting chronic kidney disease.

What are the terms of the loan from Hercules Capital to Tricida?

The loan bears a floating interest rate starting at 8.75%, with interest-only payments until August 2024, and potential extensions based on FDA approval timelines.

When can Tricida draw down the $100 million from the debt facility?

Tricida can access the $100 million subject to achieving certain milestones, with specific amounts available at various stages related to the NDA and FDA approvals.

How does this financing impact Tricida's future plans?

This financing provides Tricida with critical resources to support the upcoming NDA resubmission for veverimer, allowing them to maintain progress in addressing CKD.

What is veverimer and its relevance in the market?

Veverimer is Tricida's investigational drug aimed at slowing CKD progression related to metabolic acidosis, targeting a significant unmet medical need in the market.