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  • ADC Therapeutics Announces $175 Million Senior Secured Term Loan from Owl Rock and Oaktree and Settlement of Existing Senior Secured Convertible Notes

ADC Therapeutics Announces $175 Million Senior Secured Term Loan from Owl Rock and Oaktree and Settlement of Existing Senior Secured Convertible Notes

By on August 15, 2022 0

LAUSANNE, Switzerland–(BUSINESS WIRE)–ADC Therapeutics SA (NYSE:ADCT) today announced that it has completed a series of strategic transactions in which:

  • Entered into a new $175 million senior secured term loan with certain funds of Owl Rock, a division of Blue Owl Capital, Inc. (“Owl Rock”) and funds managed by Oaktree Capital Management, LP (“Oaktree”) with an initial loan tranche of $120 million received at closing today;

  • Full settlement of $115 million aggregate principal amount of convertible senior secured notes held by Deerfield Management Company (“Deerfield”) due May 2025 for (i) $117.3 million in cash, including fees contractual exit dates on principal repayment, (ii) 2,390,297 common shares approximately equal to the value of the interest remaining due on the convertible debenture until the end of the term, and (iii) warrants to purchase a total 4,412,840 common shares at exercise prices of $24.70 and $28.07 per share;

  • Entered into a stock purchase agreement with certain funds of Owl Rock, a division of Blue Owl Capital Inc., for an investment of $6.25 million for 733,568 common shares.

“We are pleased to enter into this agreement with Owl Rock and Oaktree, the proceeds of which will be used to pay the cash consideration upon the exchange of secured convertible credit notes held by Deerfield,” said Ameet Mallik, Chief Executive Officer of ADC. Therapeutics. . “This new credit facility has a term of seven years and allows us to continue to maximize the potential of ZYNLONTA and advance our pipeline of novel antibody-drug conjugates for hematological malignancies and solid tumors. Continued equity support from Deerfield and additional equity support from Owl Rock are also very positive, and we are pleased to maintain our cash trail through early 2025 as this transaction is roughly neutral in species during this period.

Pursuant to the loan and guarantee agreement, the Company made an initial drawdown of $120 million on August 15, 2022. This amount was used by the Company to fund the cash consideration in connection with the settlement of the convertible notes Deerfield’s first-ranking guarantees. Up to two additional tranches of $27.5 million each may be drawn down by the Company subject to meeting certain conditions within 18 months. The term loan matures on August 15, 2029 and bears interest at an annual rate of overall secured funding rate (SOFR) plus 7.50% or at base rate plus 6.50% for the first five years of the loans. term and at an annual rate of SOFR. increased by 9.25% or a base rate increased by 8.25% thereafter. In addition, the Company has issued to lenders under term loan warrants for the purchase of an aggregate number of common shares equal to $4.375 million divided by the volume weighted average price of the ordinary shares for the ten trading days preceding their issue and the ten trading days from their issue, which warrants are exercisable for ten years from their issue.

Owl Rock has also agreed to purchase 733,568 shares of common stock for $8.52 per share, which represents the 5-day volume-weighted average price through Friday, August 12, 2022. The transaction is expected to close upon record. the necessary capital increase with the commercial register in Switzerland.

Sandip Agarwala, Managing Director of Owl Rock, commented:This transaction demonstrates our ability to integrate our expertise in the life sciences industry and our tailored multi-stock approach to help provide growth capital to companies like ADC Therapeutics. We are excited to invest in ADC Therapeutics’ strong team, portfolio and track record of success in the development and commercialization of lifesaving cancer therapies, including ZYNLONTA.

“We are excited to partner with ADC Therapeutics as it continues to develop a pipeline of new ADCs for hematological malignancies and solid tumors,” said Aman Kumar, Co-Head of Life Sciences Lending Portfolio at Oaktree. “This is a significant moment in the company’s development with its first product approval validating its class-leading ADC platform. This capital commitment represents our belief in the long-term potential of ADC Therapeutics and we look forward to working with the company’s management team during this next phase of growth. »

Elise Wang, Partner, Head of Private Capital Markets at Deerfield, said: “We have been supporting ADC Therapeutics since its successful IPO in May 2020 as an equity investor in the IPO and also providing the convertible debenture which is retired today. We are very pleased to take a significant portion of the redemption consideration in ADCT shares and look forward to continuing to support the company in the future.

The transactions described herein are described in more detail in a report on Form 6-K filed today with the Securities and Exchange Commission. The descriptions presented herein are qualified in their entirety by reference to the additional descriptions included in the report on Form 6-K.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, and there will be no sale of the securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Morgan Stanley & Co. LLC acted as sole placement agent for ADC Therapeutics in connection with this transaction.

About ADC Therapeutics

ADC Therapeutics (NYSE:ADCT) is a commercial-stage biotechnology company that improves the lives of people affected by cancer through its next-generation antibody-targeted drug conjugates (ADCs). The company is advancing its proprietary PBD-based ADC technology to transform the treatment paradigm for patients with hematological malignancies and solid tumors.

ADC Therapeutics’ CD19-directed ADC ZYNLONTA (loncastuximab tesirine-lpyl) is FDA-approved for the treatment of relapsed or refractory diffuse large B-cell lymphoma after two or more lines of systemic therapy. ZYNLONTA is also being developed in combination with other agents. Cami (camidanlumab tesirine) is being evaluated in a pivotal Phase 2 trial for relapsed or refractory Hodgkin’s lymphoma and in a Phase 1b clinical trial for various advanced solid tumors. In addition to ZYNLONTA and Cami, ADC Therapeutics has several ADCs in clinical and preclinical development.

ADC Therapeutics is based in Lausanne (Biopôle), Switzerland, and operates in London, the San Francisco Bay Area and New Jersey. For more information, please visit https://adctherapeutics.com/ and follow the company on Twitter and LinkedIn.

ZYNLONTA® is a registered trademark of ADC Therapeutics SA.

Forward-looking statements

This press release contains statements that constitute forward-looking statements. All statements other than statements of historical facts contained in this press release, including statements regarding our future operating results and financial condition, cash flow, business and business strategy, market opportunities, products and product candidates, research pipeline, ongoing and planned preclinical studies and clinical trials, regulatory submissions and approvals, expected revenues and expenses and timing of revenues and expenses, timing and likelihood of success , as well as management’s plans and objectives for future operations, are forward-looking statements. Forward-looking statements are based on the beliefs and assumptions of our management and on information currently available to our management. These statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied by the forward-looking statements due to a variety of factors, including those described in our filings with the Securities and Exchange. United States Commission. No assurance can be given that these future results will be achieved. These forward-looking statements contained herein speak only as of the date of this press release. We expressly disclaim any obligation or undertaking to update any of the forward-looking statements contained in this press release to reflect any change in our expectations or any change in events, conditions or circumstances on which such statements are based, except as required by applicable law. ‘required. . No representation or warranty (express or implied) is made as to the accuracy of these forward-looking statements.