89bio gets up to $100 million of term loans in four tranches

By Wendy Van Sickle

Columbus, Ohio, Jan. 6 – 89bio, Inc. and some of its subsidiaries entered into a loan and security agreement with K2 HealthVentures LLC as administrative agent and Ankura Trust Co., LLC as collateral agent on Jan. 4, according to an 8-K filing with the Securities and Exchange Commission.

The loan agreement provides up to $100 million principal of term loans consisting of a first tranche of $25 million funded at closing, two subsequent tranches totaling $25 million to be funded upon the achievement of certain time-based, clinical and regulatory milestones and a subsequent fourth tranche of up to $50 million upon the company’s request, subject to review by the lenders of certain information from the company and discretionary approval by the lenders.

The term loan matures on Feb. 1, 2027, but the maturity date may be extended to Aug. 1, 2027 if the second and third tranches are funded and the company achieves certain other financing milestones.

The obligations of the borrowers under the loan agreement are secured by certain assets of the borrowers.

The term loan bears a variable interest rate equal to the greater of 8.45% and the Prime rate plus 225 basis points.

The lenders may elect at any time prior to the full repayment of the term loan to convert up to $7.5 million of the principal amount of the outstanding loans into shares of the company’s common stock at a conversion price equal to 130% of the lowest trailing three-day volume-weighted average price for the period starting Dec. 15, 2022 through and including the 15th trading day after the closing date.

Proceeds are expected to be used for working capital and general corporate requirements.

89bio is a San Francisco-based clinical-stage biopharma company focused on the development and commercialization of innovative therapies for patients with liver and cardiometabolic diseases.

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