Item 1.01 Entry into Material Definitive Agreements.
On January 5, 2022, Coherus BioSciences, Inc. (the "Company") and its domestic
subsidiaries (the "Guarantors" and, collectively with the Company, the "Credit
Parties") entered into a loan agreement (the "Loan Agreement") with BioPharma
Credit PLC, a public limited company incorporated under the laws of England and
Wales with company number 10443190 (as the "Collateral Agent"), BPCR Limited
Partnership, a limited partnership established under the laws of England and
Wales with registration number LP020944 (as a "Lender") and Biopharma Credit
Investments V (Master) LP, a Cayman Islands exempted limited partnership acting
by its general partner, BioPharma Credit Investments V GP LLC (as a "Lender")
that provides for a senior secured term loan facility of up to $400.0 million
(inclusive of a $100.0 million uncommitted additional facility amount) to be
funded in four committed tranches: (i) a Tranche A Loan in an aggregate
principal amount of $100.0 million (the "Tranche A Loan") that was funded on
January 5, 2022 (the "Tranche A Closing Date"); (ii) a Tranche B Loan in an
aggregate principal amount of $100.0 million (the "Tranche B Loan") to be funded
no later than April 1, 2022, subject to the delivery of evidence of repayment,
repurchase or redemption of indebtedness outstanding under the Company's 8.2%
Senior Convertible Notes due March 2022 and certain customary deliverables;
(iii) a Tranche C Loan in an aggregate principal amount of $50.0 million (the
"Tranche C Loan") to be funded at the Company's option between April 1, 2022 and
March 17, 2023, subject to certain conditions including the first U.S. Food and
Drug Administration ("FDA") approval of a Biologics License Application ("BLA")
for the Company's product candidate CHS-007 (toripalimab) in the United States;
and (iv) a Tranche D Loan in an aggregate principal amount of $50.0 million (the
"Tranche D Loan" and, together with the Tranche A Loan, the Tranche B Loan, and
the Tranche C Loan, the "Term Loans") to be funded at the Company's option
between April 1, 2022 and March 17, 2023, subject to certain conditions
including the first FDA approval of a BLA for the Company's product candidate
CHS-201 (ranibizumab biosimilar) in the United States. The Company has the right
to request an uncommitted additional facility amount of up to $100.0 million
after the Tranche A Closing Date that will be subject to new terms and
conditions.
The Term Loans mature on either (i) the fifth anniversary of the Tranche A
Closing Date; or (ii) October 15, 2025, if the outstanding aggregate principal
amount of the Company's 1.5% Convertible Senior Subordinated Notes due 2026 is
greater than $50.0 million on October 1, 2025 (the "Maturity Date").
The Term Loans bear interest at 8.25% plus three-month LIBOR per annum with a
LIBOR floor of 1.00%. In the event of the cessation of LIBOR, the benchmark
governing the interest rate will be replaced with a rate based on the secured
overnight financing rate published by the Federal Reserve Bank of New York as
described in the Loan Agreement. Interest is payable quarterly in arrears.
Repayment of outstanding principal of the Term Loans will be made in five equal
quarterly payments of principal commencing after the 48-month anniversary of the
Tranche A Closing Date.
The Company will pay to the Lenders a funding fee equal to 2.00% of the Lenders'
total committed amount to fund the Tranche A Loan, Tranche B Loan, Tranche C
Loan and Tranche D Loan, payable on the Tranche A Closing Date. In addition, in
the event any of the Term Loans is prepaid in whole or in part prior to the
Maturity Date or is accelerated, it will be subject to a prepayment fee. Prior
to the third anniversary of the Tranche A Closing Date, the prepayment fee is
3.00% of the principal amount prepaid. After the third anniversary but prior to
the fourth anniversary of the Tranche A Closing Date, the prepayment fee is
2.00% of the principal amount prepaid; thereafter and prior to the Maturity
Date, the prepayment fee is 1.00% of the principal amount prepaid. In addition
to the prepayment fees, in connection with a full or partial prepayment of a
tranche prior to the second anniversary of the applicable funding, a
"make-whole" amount will be payable equal to the foregone interest from the date
of prepayment through the second anniversary of the Tranche A Closing Date.
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The obligations under the Loan Agreement are secured pursuant to customary
security documentation, including a guaranty and security agreement among the
Credit Parties and the Collateral Agent which provides for a lien on
substantially all of the Company's and the Guarantors' tangible and intangible
assets and property, including intellectual property (the "Collateral").
Pursuant to the Loan Agreement, and subject to certain restrictions, proceeds of
the Term Loans will be used to fund the Company's general corporate and working
capital requirements except for the following: proceeds of the Tranche A Loan
will be used to repay in full all amounts outstanding under the Company's Prior
Loan Agreement, as discussed and defined in Item 1.02 below, as well as all
associated costs and expenses; and proceeds of the Tranche B Loan will be used
at the option of the Company to repay, repurchase or redeem in cash, in full,
the Company's existing 8.2% Convertible Senior Subordinated notes due 2022 as
well as all associated costs and expenses.
The Loan Agreement contains certain customary representations and warranties. In
addition, the Loan Agreement includes affirmative covenants, such as the
requirement to maintain minimum trailing twelve month net sales in an amount
that begins at $200 million in the current quarter and increases to $210 million
. . .
Item 1.02 Termination of a Material Definitive Agreement.
On January, 5, 2022, in connection with the funding of the Tranche A Loan and
pursuant to a payoff letter between the Company and HCR Collateral Management,
LLC, the Company voluntarily prepaid all amounts outstanding under that certain
Credit Agreement, dated as of January 7, 2019, by and among the Company, the
other Credit Parties, HCR Collateral Management, LLC, and the lenders from time
to time party thereto (as amended to date, the "Prior Loan Agreement"), pursuant
to which a payoff amount of $81.9 million was outstanding. In connection with
such repayment, all of the Credit Parties' obligations under the Prior Loan
Agreement and all related documents have been paid and discharged in full, all
loan documents terminated, all commitments by the lenders under the Prior Loan
Agreement terminated, and all security interests or liens granted by the Company
to such lenders to secure the Credit Parties' obligations under the Prior Loan
Agreement have been terminated and released (other than with respect to
customary provisions and agreements that are expressly specified to survive the
termination). The loans under the Prior Loan Agreement were scheduled to mature
on January 7, 2025. The foregoing description of the Prior Loan Agreement does
not purport to be complete and is qualified in its entirety by reference to the
full text of the Prior Loan Agreement, a copy of which was filed as Exhibit 10.1
to the Company's Current Report on Form 8-K on January 11, 2019 and the
Company's Current Report on Form 8-K on April 14, 2020, and incorporated by
reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
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Item 8.01 Other Events.
On January 7, 2022, the Company issued a press release announcing entry into the
Loan Agreement. A copy of the press release is attached hereto as Exhibit 99.1
and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
10.1 Loan Agreement dated as of January 5, 2022 among the Company, the
Guarantors, the Collateral Agent and the Lenders party thereto.
99.1 Press Release, dated January 7, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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