aibioInhibrx Biosciences gets $100.0 million at close of Oxford Finance term loan facility
Tickers INBX
The loan agreement allows up to $150.0 million, with the remaining $50.0 million at the lenders' sole discretion. The loan matures January 1, 2030 and comes with warrants for 140,741 shares at $14.21. Oxford Finance LLC is collateral agent.
Key facts
- Company
- Inhibrx Biosciences, Inc. (NASDAQ: INBX)
- News type
- Debt Financing
- Primary source
- Inhibrx Biosciences, Inc. Form 8-K filed January 13, 2025 (SEC EDGAR)
Inhibrx Biosciences, Inc. (Nasdaq: INBX) signed a loan and security agreement with Oxford Finance LLC that provides a term loan facility of up to $150.0 million, of which $100.0 million was funded at closing. The company disclosed the deal in a Form 8-K filed January 13, 2025. The remaining $50.0 million can be requested by the company and funded only at the lenders' sole discretion.
Oxford Finance LLC is collateral agent, and other lenders are parties to the agreement. The filing names no placement agent, underwriter or law firm for the loan.
The loan terms
The Loan and Security Agreement is dated January 13, 2025. The term loan facility matures on January 1, 2030.
Interest is 5.61% plus the greater of the 1-Month Term Secured Overnight Financing Rate, as published by the CME Group, or 4.34%. The company pays interest only through February 1, 2028. Principal payments begin on March 1, 2028, followed by 23 months of equal payments of principal and interest.
A final payment of 9.0% of the total repaid principal is due to the lenders on a pro rata basis at the earliest of maturity, acceleration of any term loan or prepayment. The company may prepay the balance in full before maturity, subject to a prepayment fee of 2.0% to 5.0%, depending on timing.
All obligations are secured by a first priority lien on substantially all present and future assets of the company, subject to certain exceptions.
Warrants
In connection with the first tranche, Inhibrx issued the lenders Term A Warrants to purchase 140,741 shares of common stock at $14.21 per share. The filing says that number equals 2.0% of the initial term loan divided by that strike price.
If the company draws an additional tranche, it must issue Term B Warrants. Their size is set at 2.0% of the additional amount, divided by an exercise price tied to the stock's recent closing prices. The warrants are immediately exercisable and expire 10 years from issuance. The company relied on exemptions under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D, and each lender represented that it is an accredited investor.
Covenants and defaults
The agreement restricts the company and its subsidiaries, including on debt, liens, mergers and other fundamental changes, investments, affiliate transactions, dividends and asset sales. It also requires the company to maintain a minimum liquidity amount.
Events of default include non-payment, covenant violations, a material adverse change, cross-default to other material debt, bankruptcy and insolvency, unsatisfied judgments and delisting. After one, the collateral agent and lenders may declare all obligations immediately due and proceed against the collateral.
What the company says
In the press release, Chief Financial Officer Kelly Deck said: "This enables us strategic flexibility post data readouts expected later this year for our INBRX-109 and INBRX-106 programs." The release says the facility is five years in length. Christopher Herr, senior managing director at Oxford, said the lender is proud to further its partnership with Inhibrx.
The CFO links the facility's flexibility to readouts expected later this year, but the filing does not say whether the company plans to request the undrawn $50.0 million.
About the company and the lender
Inhibrx Biosciences is a clinical-stage biopharmaceutical company developing biologic therapeutic candidates. It was incorporated in January 2024 as a wholly owned subsidiary of Inhibrx, Inc., and it is based in La Jolla, California. Before the sale of Inhibrx, Inc. and the INBRX-101 program to Sanofi S.A., Inhibrx Biosciences acquired certain assets and liabilities, and Inhibrx, Inc. distributed 92% of its shares of Inhibrx Biosciences to its stockholders. Its pipeline includes ozekibart (INBRX-109) and INBRX-106.
Oxford Finance is headquartered in Alexandria, Virginia. The release says it has originated more than $14 billion in loans since 2002.
What comes next
The company's interest-only period runs through February 1, 2028, and principal payments start on March 1, 2028. The facility matures on January 1, 2030. The undrawn $50.0 million depends on the lenders' discretion.