Exagen Inc. Announces Senior Secured Credit Facility with Perceptive Advisors

Rhea-AI Summary

Exagen Inc. (XGN) has secured a senior secured credit facility of up to $75 million with Perceptive Advisors The company received an initial $25 million tranche at closing to refinance existing debt with Innovatus Capital Partners and strengthen its balance sheet.

The facility includes additional tranches:

• $10 million available through March 2026 (revenue milestone-based)
• $10 million through December 2026 (revenue milestone-based)
• $30 million through March 2027 for business development initiatives

The loan terms include Term SOFR + 7% interest (SOFR floor 4.75%), 60-month interest-only payments, and warrants for 400,000 shares initially, with potential for 750,000 additional warrants tied to future tranches. The loan is secured by substantially all of Exagen's assets.

Positive

• Secured up to $75M credit facility providing significant growth capital
• Extended debt maturity with 60-month interest-only payment period
• Refinanced existing debt while strengthening balance sheet
• Access to additional capital through milestone-based tranches
• Minimally dilutive financing structure compared to equity offering

Negative

• New debt secured by substantially all company assets
• Potential dilution from warrant issuance of up to 1.15M shares
• Higher interest rate with SOFR + 7% (minimum 11.75% total)
• Additional tranches subject to achieving revenue milestones

Insights

Financial Analyst

Exagen's new $75M debt facility extends maturity, eliminates near-term amortization, and provides growth capital with minimal dilution.

This $75 million debt facility with Perceptive Advisors represents a significant balance sheet restructuring for Exagen. The immediate $25 million funding retiring existing debt obligations extends Exagen's financial runway through a favorable 60-month interest-only period - postponing principal repayments that would otherwise constrain near-term cash flow.

The milestone-based additional tranches create a performance-linked capital structure: two $10 million tranches tied to revenue achievements through 2026, plus a $30 million business development tranche. This structure provides capital access without immediate equity dilution while aligning financing with operational success.

The financing terms (Term SOFR + 7% with 4.75% SOFR floor) appear reasonable for Exagen's market position. The warrant component (400,000 shares initially with tiered pricing at 10-day VWAP and VWAP+12.5%) minimizes immediate dilution compared to direct equity raises.

Securing Perceptive Advisors as a partner is noteworthy - they bring deep life sciences expertise beyond mere capital. This transaction strengthens Exagen's capital structure by extending maturity while preserving flexibility for business development initiatives in the autoimmune testing market.

$25 Million Funded at Close to Refinance Existing Debt and Extend Maturity

Additional Borrowing Capacity Provides Minimally Dilutive Growth Capital

CARLSBAD, Calif., April 28, 2025 (GLOBE NEWSWIRE) -- Exagen Inc. (Nasdaq: XGN), a leading provider of autoimmune testing solutions, today announced it has entered into an agreement with Perceptive Advisors LLC for a term loan credit facility of up to $75 million, with $25 million funded at closing to retire an existing debt facility and strengthen the balance sheet.

“I’m pleased to announce our new debt facility with Perceptive Advisors, a highly respected life sciences investor with a deep understanding of our industry. This strategic partnership extends our amortization timeline, strengthens our balance sheet and provides optionality to accelerate future growth initiatives with access to minimally dilutive capital,” said John Aballi, President and Chief Executive Officer.

“We are excited to partner with Exagen and its management team on their journey to accelerate personalized medicine in autoimmune disease,” said Sam Chawla, Portfolio Manager at Perceptive Advisors. “The Company has a proven track record of advancing diagnoses and providing clinical benefits, and we believe this transaction further enables Exagen to build its leadership position and empower rheumatologists and other healthcare practitioners to greatly enhance patient care.”

On April 25, 2025, Exagen entered into a credit and guaranty agreement pursuant to which Perceptive has agreed to make certain term loans in the aggregate principal amount of up to $75 million. The first $25 million tranche was funded at close and used to retire Exagen's existing term debt facility with Innovatus Capital Partners.

Additional tranches are available at Exagen’s election, as follows:

• Second Tranche - $10 million available through March 31, 2026, upon and subject to achievement of certain revenue milestones.
• Third Tranche - $10 million available through December 31, 2026, upon and subject to achievement of certain revenue milestones.
• Business Development Tranche - $30 million available through March 31, 2027, to be funded at the discretion of Perceptive for the Company’s business development initiatives.
  

Interest under the credit agreement is Term SOFR + 7%, with a SOFR floor of 4.75%. Exagen will make interest-only payments for 60 months, with the entire outstanding interest and principal amount due and payable upon maturity. The loan is secured by substantially all of Exagen’s assets.

In connection with the initial close, Exagen issued to Perceptive a warrant to purchase 400,000 shares of Exagen common stock, of which 200,000 shares are exercisable at an exercise price of $4.96 per share, equal to the 10-day VWAP immediately prior to the close, and 200,000 are exercisable at an exercise price of $5.58 per share, equal to the 10-day VWAP immediately prior to the close, plus twelve and one-half percent (12.5%).

An additional up to 750,000 warrants may be issued to Perceptive as follows:

• 150,000 shares with the closing of each of the Second and Third tranches, and
• 450,000 shares with the closing of the Business Development Tranche

The per-share exercise price for 50% of each tranche’s shares will be equal to the 10-day VWAP ending on the business day immediately preceding each tranche's funding date. The per-share exercise price for the balance of each tranche’s warrants will be equal to the 10-day VWAP immediately preceding the funding date, plus twelve and one-half percent (12.5%) of the 10-day VWAP immediately preceding each tranche’s funding date.

Credo 180, Inc. acted as sole financial advisor to Exagen on this transaction.

Additional details regarding the financing will be included on a Form 8-K, which Exagen will file with the Securities and Exchange Commission within four business days of the closing of the credit agreement.

About Exagen

Exagen Inc. (Nasdaq: XGN) is a leading provider of autoimmune diagnostics, committed to transforming care for patients with chronic and debilitating autoimmune conditions. Based in San Diego County, California, Exagen’s mission is to provide clarity in autoimmune disease decision making and improve clinical outcomes through its innovative testing portfolio. The Company’s flagship product, AVISE^® CTD, enables clinicians to more effectively diagnose complex autoimmune conditions such as lupus, rheumatoid arthritis, and Sjögren’s syndrome earlier and with greater accuracy. Exagen’s laboratory specializes in the testing of rheumatic diseases, delivering precise and timely results, supported by a full suite of AVISE^®-branded tests for disease diagnosis, prognosis, and monitoring. With a focus on research, innovation, education, and patient-centered care, Exagen is dedicated to addressing the ongoing challenges of autoimmune disease management.

For more information, please visit Exagen.com or follow @ExagenInc on X (formally known as Twitter).

Forward Looking Statements

Exagen cautions you that statements contained in this press release regarding matters that are not historical facts are forward-looking statements. These statements are based on Exagen’s current beliefs and expectations. Such forward-looking statements include, but are not limited to, statements regarding: the potential advantages to the Company of entering into the credit agreement; the potential funding of future tranches pursuant to the credit agreement that are subject to conditions and milestones that may not occur; evaluations and judgements regarding past and future performance; and the potential utility and effectiveness of Exagen’s services and testing solutions. The inclusion of forward-looking statements should not be regarded as a representation by Exagen that any of its plans will be achieved. Actual results may differ from those set forth in this press release due to the risks and uncertainties inherent in Exagen’s business, including, without limitation: delays in reimbursement and coverage decisions from Medicare and third-party payors and in interactions with regulatory authorities, and delays in ongoing and planned clinical trials involving its tests; and changes in laws and regulations related to Exagen’s regulatory requirements. Exagen’s commercial success depends upon attaining and maintaining significant market acceptance of its testing products among rheumatologists, patients, third-party payors and others in the medical community; Exagen’s ability to successfully execute on its business strategies; third-party payors not providing coverage and adequate reimbursement for Exagen’s testing products, including Exagen’s ability to collect on funds due; Exagen’s ability to obtain and maintain intellectual property protection for its testing products; regulatory developments affecting Exagen’s business; and other risks described in Exagen’s prior press releases and Exagen’s filings with the Securities and Exchange Commission (“SEC”), including under the heading “Risk Factors” in Exagen’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 11, 2025 and any subsequent filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and Exagen undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Contact:
Ryan Douglas
Exagen Inc.
ir@exagen.com
760.560.1525

FAQ

What are the key terms of Exagen's (XGN) new credit facility with Perceptive Advisors?

The facility provides up to $75M total, with $25M funded at close. Interest rate is Term SOFR + 7% with 60-month interest-only payments. The loan is secured by Exagen's assets and includes warrant issuance.

How many warrants did Exagen (XGN) issue to Perceptive Advisors in the initial closing?

400,000 warrants total: 200,000 at $4.96 per share and 200,000 at $5.58 per share, based on 10-day VWAP calculations.

What are the milestone-based tranches available in Exagen's (XGN) credit facility?

Two $10M tranches are available through March 2026 and December 2026, subject to revenue milestones. An additional $30M business development tranche is available through March 2027.

How did Exagen (XGN) use the initial $25M from the credit facility?

The initial $25M was used to retire Exagen's existing term debt facility with Innovatus Capital Partners and strengthen the balance sheet.