Merrimack Pharmaceuticals, Inc. (NASDAQ:MACK) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
On July2, 2018, Merrimack Pharmaceuticals, Inc. (the “Company”) entered into a Loan and Security Agreement (the “Loan Agreement”) by and among the Company, certain subsidiaries of the Company from time to time party thereto, the several banks and other financial institutions or entities from time to time parties thereto (collectively referred to as “Lender”) and Hercules Capital, Inc., in its capacity as administrative agent and collateral agent for itself and Lender (in such capacity, “Agent”), to which a term loan of up to an aggregate principal amount of $25.0million is available to the Company. The Loan Agreement provides for an initial term loan advance of $15.0million, which closed on July2, 2018, and, at the Company’s option, two additional term loan advances of $5.0million each upon the occurrence of certain funding conditions prior to December31, 2018 and December31, 2019, respectively.
The term loan bears interest at an annual rate equal to the greater of 9.25% and 9.25% plus the prime rate of interest minus 5.25%. The Loan Agreement provides for interest-only payments for eighteen months and repayment of the aggregate outstanding principal balance of the term loan in monthly installments starting on February1, 2020 and continuing through August1, 2021 (the “Maturity Date”). In addition, the Company paid a fee of $250,000 upon closing and is required to pay a fee of 5.55% of the aggregate amount of advances under the Loan Agreement at maturity. At the Company’s option, the Company may elect to prepay all, but not less than all, of the outstanding term loan by paying the entire principal balance and all accrued and unpaid interest thereon plus a prepayment charge equal to the following percentage of the principal amount being prepaid: 3% if the term loan is prepaid during the first 12 months following the initial closing and 1% if the term loan is prepaid any time thereafter but prior to the Maturity Date.
In connection with the Loan Agreement, the Company granted Agent a security interest in all of the Company’s personal property now owned or hereafter acquired, excluding intellectual property but including licenses of and the proceeds from the sale, if any, of intellectual property, and a negative pledge on intellectual property. The Loan Agreement also contains certain events of default, representations, warranties and non-financial covenants of the Company. In addition, the Loan Agreement grants Lender an option to purchase up to an aggregate of $1.0million of the Company’s equity securities, or instruments exercisable for or convertible into equity securities, sold to investors in any private financing within one year after the initial closing under the Loan Agreement upon the same terms and conditions afforded to such other investors.
The foregoing description of the Loan Agreement does not purport to be complete and is qualified in its entirety by reference to the Loan Agreement filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
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 with respect to the Loan Agreement is incorporated by reference into this Item 1.01.
Item 1.01. Financial Statements and Exhibits.
(d) Exhibits
MERRIMACK PHARMACEUTICALS INC ExhibitEX-10.1 2 d466633dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 LOAN AND SECURITY AGREEMENT THIS LOAN AND SECURITY AGREEMENT is made and dated as of July 2,…To view the full exhibit click here
About Merrimack Pharmaceuticals, Inc. (NASDAQ:MACK)
Merrimack Pharmaceuticals, Inc. is a biopharmaceutical company. The Company is engaged in discovering, developing and commercializing medicines consisting of therapeutics paired with companion diagnostics for the treatment of cancer. Its therapeutic oncology candidates in clinical development include MM-398, MM-302, MM-121, MM-141 and MM-151. Its ONIVYDE (irinotecan liposome injection), also known as MM-398, is an encapsulation of the marketed chemotherapy drug irinotecan in a liposomal formulation. MM-302 is an antibody drug conjugated liposomal doxorubicin that targets the ErbB2 (HER2) receptor. MM-121 is a fully human monoclonal antibody that targets Erb-B2 Receptor Tyrosine Kinase 3 (ErbB3). MM-141 is a fully human tetravalent bispecific antibody designed to block tumor survival signals by targeting receptor complexes. MM-151 is an oligoclonal therapeutic designed to bind to non-overlapping epitopes of EGFR (ErbB1).
