PUMA BIOTECHNOLOGY, INC. (NASDAQ:PBYI) Files An 8-K Entry into a Material Definitive Agreement

PUMA BIOTECHNOLOGY, INC. (NASDAQ:PBYI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01

To the extent required under Form 8-K, the information set forth below under Item 2.03 of this Current Report on Form 8-K is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On the Effective Date, the Company entered into the new credit facility with Oxford Finance LLC (“Oxford”), as collateral agent, and the lenders party thereto from time to time (the “Lenders”), including Oxford, to which the Lenders party to the new credit facility agreed to amend and restate the obligations owed to such Lenders under the Company’s prior credit facility. On the Effective Date, the Company issued to Oxford new and/or replacement secured promissory notes in an aggregate principal amount for all such promissory notes of $100.0 million evidencing the new credit facility. No additional money remains available to the Company under the new credit facility.

The new credit facility is secured by substantially all of the Company’s personal property other than its intellectual property. The Company also pledged 65% of the issued and outstanding capital stock of its subsidiaries, Puma Biotechnology Ltd. and Puma Biotechnology B.V. The new credit facility limits the Company’s ability to grant any interest in its intellectual property to certain permitted licenses and permitted encumbrances set forth in the agreement.

The term loans under the new credit facility bear interest at an annual rate equal to the greater of (i) 9.0% and (ii) the sum of (a) the “prime rate,” as reported in The Wall Street Journal on the last business day of the month that immediately precedes the month in which the interest will accrue, plus (b) 3.5%. The Company is required to make monthly interest-only payments on each term loan under the new credit facility commencing on the first calendar day of the calendar month following the funding date of such term loan, and continuing on the first calendar day of each calendar month thereafter through August 1, 2021 (the “Amortization Date”). Commencing on the Amortization Date, and continuing on the first calendar day of each calendar month thereafter, the Company will make consecutive equal monthly payments of principal, together with applicable interest, in arrears to each Lender, calculated to the new credit facility. All unpaid principal and accrued and unpaid interest with respect to each term loan under the new credit facility is due and payable in full on June 1, 2024 (the “Maturity Date”). Upon repayment of such term loans, the Company is also required to make a final payment to the Lenders equal to 7.5% of the aggregate principal amount of such term loans outstanding as of the Effective Date.

At the Company’s option, the Company may prepay the outstanding principal balance of any term loan in whole but not in part, subject to a prepayment fee of 3.0% of any amount prepaid if the prepayment occurs through and including the first anniversary of the funding date of such term loan, 2.0% of the amount prepaid if the prepayment occurs after the first anniversary of the funding date of such term loan through and including the second anniversary of the funding date of such term loan, and 1.0% of the amount prepaid if the prepayment occurs after the second anniversary of the funding date of such term loan and prior to the Maturity Date.

The new credit facility includes affirmative and negative covenants applicable to the Company, its current subsidiary and any subsidiaries the Company creates in the future. The affirmative covenants include, among others, covenants requiring the Company to maintain its legal existence and governmental approvals, deliver certain financial reports, maintain insurance coverage and satisfy certain requirements regarding deposit accounts. The Company must also achieve product revenue, measured as of the last day of each fiscal quarter on a trailing year to

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date basis, for the periods ending June 30, 2019, September 30, 2019 and December 31, 2019. New minimum revenue levels will be established for each subsequent fiscal year by mutual agreement of the Company, Oxford, as collateral agent, and the Lenders. The negative covenants include, among others, restrictions on the Company’s transferring collateral, incurring additional indebtedness, engaging in mergers or acquisitions, paying dividends or making other distributions, making investments, creating liens, selling assets and suffering a change in control, in each case subject to certain exceptions.

The new credit facility also includes events of default, the occurrence and continuation of which could cause interest to be charged at the rate that is otherwise applicable plus 5.0% and would provide Oxford, as collateral agent, with the right to exercise remedies against the Company and the collateral securing the new credit facility, including foreclosure against the property securing the new credit facility, including its cash. These events of default include, among other things, the Company’s failure to pay principal or interest due under the new credit facility, a breach of certain covenants under the new credit facility, the Company’s insolvency, a material adverse change, the occurrence of any default under certain other indebtedness in an amount greater than $500,000 and one or more judgments against the Company in an amount greater than $500,000 individually or in the aggregate.

The foregoing description of the new credit facility and the secured promissory notes is only a summary of the material terms thereof, and does not purport to be complete. The description is qualified in its entirety by reference to the new credit facility and the form of secured promissory note, which will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019.


About PUMA BIOTECHNOLOGY, INC. (NASDAQ:PBYI)

Puma Biotechnology, Inc. is a biopharmaceutical company that focuses on the development and commercialization of products for the treatment of cancer. The Company focuses on in-licensing the global development and commercialization rights to over three drug candidates, including PB272 (neratinib (oral)), which the Company is developing for the treatment of patients with human epidermal growth factor receptor type 2 (HER2), positive breast cancer, and patients with non-small cell lung cancer, breast cancer and other solid tumors that have a HER2 mutation; PB272 (neratinib (intravenous)), which the Company is developing for the treatment of patients with advanced cancer, and PB357, which is an orally administered agent. Neratinib is a potent irreversible tyrosine kinase inhibitor (TKI) that blocks signal transduction through the epidermal growth factor receptors (EGFRs), HER1, HER2 and HER4.

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