AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
On December28, 2017 (the “Closing Date”), AVEO Pharmaceuticals, Inc. (the “Company”) entered into an Amended and Restated Loan and Security Agreement (the “Loan Agreement”) with Hercules Funding III, LLC (the “Lender”) and Hercules Capital, Inc., as agent (the “Agent”), amending and restating that certain Loan and Security Agreement dated as of May28, 2010, by and among the Company, the Agent, Hercules Technology III, L.P. and the several banks and financial institutions from time to time parties thereto, as amended to date (the “Existing Loan Agreement”).
to the Loan Agreement, the Company refinanced its outstanding principal and interest of approximately $20.0million under the Existing Loan Agreement and converted such obligations into a new term loan in the aggregate principal amount of $20.0million (the “New Term Loan”) on the Closing Date.
The New Term Loan bears per annum interest at a floating rate equal to the greater of (i)9.45% and (ii)an amount equal to 9.45% plus the prime rate of interest as reported in theWall Street Journalminus 4.75%; provided that the per annum interest rate shall not exceed 15.0% unless a default has occurred.
to the Loan Agreement, interest payments on the New Term Loan are due beginning on the first business day of the month following the Closing Date. The Company is not required to pay principal on the New Term Loan during the period from the Closing Date until February1, 2019 (the “Interest-Only Period”). In accordance with the Loan Agreement, provided that no event of default shall have occurred and continue, the Company may extend the Interest-Only Period at its election until August1, 2019, if, on or prior to September30, 2018, the Company has received positive data with respect to the Company’s Phase 3 clinical trial of tivozanib for the treatment of renal cell carcinoma for patients in the third-line setting, which positive data supports the filing by the Company of a new drug application with the U.S. Food and Drug Administration. The Loan Agreement also contains a second optional interest-only period through February 1, 2020, if specified additional conditions related to tivozanib development are met by June 28, 2019.
After the Interest-Only Period, the Company must repay the aggregate principal balance of the New Term Loan in equal monthly installments of principal and interest. The entire principal balance and all accrued but unpaid interest thereunder will be due and payable on July1, 2021 (the “Maturity Date”). At its option, upon at least seven days’ prior notice to the Lender, the Company may prepay the entire outstanding principal and accrued and unpaid interest under the New Term Loan, as well as any unpaid fees or out-of-pocket expenses of the Lender accrued thereunder, subject to a prepayment charge determined in accordance with the Loan Agreement.
In accordance with the Loan Agreement, end-of-term payments allocable to amounts borrowed under the Existing Loan Agreement will be due in the amount of approximately (i)$540,000 on January1, 2018, or on such earlier date as the New Term Loan is prepaid or obligations thereunder become due, and (ii)$300,000 on December1, 2019, or on such earlier date as the New Term Loan is prepaid or obligations thereunder become due. An additional end-of-term payment allocable to amounts borrowed under the New Term Loan in the amount of approximately $790,000 will be due on the Maturity Date, or on such earlier date as the New Term Loan is prepaid or obligations thereunder become due.
to the Loan Agreement, the Company granted the Lender a security interest in all of the Company’s personal property owned as of, or acquired after, the date of the Loan Agreement except for the Company’s intellectual property and certain other excluded assets. The Loan Agreement contains provisions related to the indemnification of the Lenders by the Company and representations and warranties of the Company.The Loan Agreement also includes affirmative and negative covenants applicable to the Company including covenants to deliver certain financial reports; to maintain insurance coverage; and to refrain from transferring assets, incurring additional indebtedness, engaging in mergers or acquisitions, paying dividends or making other distributions, making investments, creating liens, and suffering a change in control, in each case subject to certain exceptions.
The Loan Agreement provides that certain events shall constitute a default by the Company, including failure by the Company to pay amounts under the Loan Agreement when due; breach or default in the performance of any covenant under the Loan Agreement by the Company; insolvency of the Company and certain other bankruptcy
proceedings involving the Company; default by the Company of obligations involving indebtedness in excess of $500,000; and the occurrence of an event or circumstance that would have a material adverse effect upon the business of the Company, as defined in the Loan Agreement. Upon the occurrence of any such event of default by the Company, the Lender may, at its option, accelerate payment by the Company of its obligations under the Loan Agreement, together with a prepayment charge, determined in accordance with the Loan Agreement. In addition, the outstanding principal and accrued and unpaid interest under the New Term Loan, as well as any unpaid fees or out-of-pocket expenses of the Lender accrued thereunder, will become immediately due and payable at the Lender’s option upon a change in control of the Company, as described in the Loan Agreement.
The foregoing summary of the Loan Agreement is qualified in its entirety by the full text of the Loan Agreement, which is attached hereto as Exhibit 10.1 and is hereby incorporated by reference into this Item 1.01.
| Item 1.01 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
| Item 1.01 | Material Modifications to Rights of Security Holders. |
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
On January2, 2018, the Company issued a press release announcing the new debt financing facility and providing updated guidance regarding the period in which it anticipates having cash to fund its operations. The full text of the press release issued in connection with this announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
| Item 1.01. | Financial Statements and Exhibits. |
AVEO PHARMACEUTICALS INC ExhibitEX-10.1 2 d518281dex101.htm EX-10.1 EX-10.1 EXHIBIT 10.1 AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is made and dated as of December 28,…To view the full exhibit click here
About AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO)
AVEO Pharmaceuticals, Inc. is a biopharmaceutical company. The Company’s platform delivers insights into cancer and related disease. The Company’s product candidates include Tivozanib, Ficlatuzumab, AV-203 and AV-380. Tivozanib is a selective long half-life vascular endothelial growth factor tyrosine kinase inhibitor (VEGF TKI) that inhibits over three VEGF receptors. Tivozanib is designed to optimize VEGF blockade while minimizing off-target toxicities. Ficlatuzumab is a Hepatocyte Growth Factor (HGF) inhibitory antibody. AV-203 is an anti-ErbB3 monoclonal antibody with ErbB3 affinity. Its preclinical studies suggest that neuregulin1 (NRG1) levels predict AV-203 antitumor activity in preclinical models. AV-380 is a humanized Immunoglobulin G 1 (IgG1) inhibitory monoclonal antibody. AV-380 targets growth differentiating factor 15 (GDF15).