Zevra Therapeutics gets $100 million secured loan facility

By Mary-Katherine Stinson

Lexington, Ky., April 10 – Zevra Therapeutics, Inc. closed on a $100 million secured loan facility on April 5, according to an 8-K filing with the Securities and Exchange Commission.

A $60 million initial tranche was funded at closing. The remainder will be available in two additional tranches: $20 million available to the company in up to two $10 million draws until 18 months following closing and $20 million available to the company upon approval by the U.S. Food and Drug Administration of the new drug arimoclomol for the treatment of Niemann-Pick disease Type C until Dec. 31, 2024.

Funding of the second and third tranche will be dependent upon the company having satisfied certain conditions precedent.

The term loans mature on the fifth anniversary of closing.

Borrowings will bear interest initially at SOFR plus 700 basis points.

If net product sales for the calendar year ending Dec. 31, 2025 exceed $100 million the interest rate will be reduced to SOFR plus 600 bps. If net product sales do not exceed this threshold, then following any subsequent period of four consecutive fiscal quarters ending on or after March 31, 2026 in which net product sales exceed $125 million, the interest rate will be adjusted to SOFR plus 650 bps.

In all cases, SOFR is subject to a 4% floor.

Zevra has the option to pay up to 25% of the interest in-kind through and including March 31, 2026, subject to certain terms and conditions. Thereafter, all interest is to be paid in cash.

Upon repayment or prepayment, there is a final payment premium of 3% of the initial total principal amount of term loans advanced to Zevra.

The company also has the option to prepay the loans in whole, but not in part, subject to a prepayment premium in addition to the final payment premium. The prepayment premium, ranging from 0% to a make-whole plus 5% depending on the date, will also apply in the event of a change of control or any repayment or prepayment occurring prior to maturity.

Proceeds will be used to refinance existing debt of the company and its subsidiaries, pay fees and expenses related to the financing and fund the development and commercialization of Olpruva (sodium phenylbutyrate) and arimoclomol.

Alter Domus (US) LLC is the administrative agent.

The facility is guaranteed by Acer Therapeutics, Inc., Epyon Therapeutics, Inc. and Zevra Denmark A/S.

HCR Stafford Fund II, LP, HCR Potomac Fund II, LP and Perceptive Credit Holdings IV, LP are listed as the lenders.

On April 8, in connection with the financing, the company terminated and repaid in full the outstanding amounts under its note purchase agreement dated Aug. 30, 2023 with Nantahala Capital Management, LLC.

Based in Celebration, Fla., Zevra is a rare disease therapeutics company.

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