BURLINGTON, Mass. - scPharmaceuticals Inc. (NASDAQ: NASDAQ:SCPH), a biopharmaceutical company, has secured up to $125 million through debt and royalty financings with Perceptive Advisors, a life-sciences focused investment firm. The financing includes a $75 million senior secured term loan and a $50 million revenue interest financing agreement, which will support the commercialization of FUROSCIX, scPharmaceuticals' treatment for fluid overload in heart failure patients.
The term loan will refinance existing debt, reducing the minimum cash requirement to $5 million and extending the interest-only period for an additional four years. The interest rate is set at the Secured Overnight Financing Rate (SOFR) plus 6.75%, with a SOFR floor of 3.25%.
Under the revenue interest financing agreement, Perceptive will receive tiered single-digit royalties from global net sales of FUROSCIX. The royalties are capped at 1.6 times the purchase price initially, with a potential increase to 2.0 times under certain conditions. scPharmaceuticals has the option to buy out the agreement at 1.4 times the purchase price within the first two years, and at the cap amount thereafter.
FUROSCIX is designed for subcutaneous administration to treat congestion due to fluid overload in adult patients with chronic heart failure. The medication comes with a warning for potential fluid, electrolyte, and metabolic abnormalities and is contraindicated in certain patient populations, including those with anuria, hypersensitivity to furosemide, or hepatic cirrhosis.
John Tucker, CEO of scPharmaceuticals, highlighted the non-dilutive nature of the financing, which provides resources to further the company's goals of improving patient outcomes and reducing healthcare costs. Sam Chawla of Perceptive Advisors expressed support for scPharmaceuticals' mission to incorporate FUROSCIX into a new treatment paradigm for heart failure, emphasizing the potential to reduce hospital utilization and improve patient quality of life.
TD Cowen and Latham & Watkins advised scPharmaceuticals, while Morrison Foerster advised Perceptive Advisors in these transactions. This financial move is based on a press release statement from scPharmaceuticals Inc.
InvestingPro Insights
Following scPharmaceuticals Inc.'s announcement of securing significant financing to bolster the commercialization of its heart failure treatment, FUROSCIX, investors are closely monitoring the company's financial health and market performance.
According to InvestingPro data, scPharmaceuticals currently holds a market capitalization of $156.12 million, with a notably high Price / Book ratio of 6.35 as of the last twelve months leading into Q1 2024. Despite this valuation, the company has shown a staggering revenue growth of 754.68% during the same period, which indicates a potentially strong market demand for its product offerings.
InvestingPro Tips suggest that while scPharmaceuticals holds more cash than debt, which is a positive sign for liquidity, the company is quickly burning through cash and analysts do not anticipate profitability within this year. This aligns with the strategic move to secure non-dilutive financing, as maintaining liquidity will be crucial for the company's operations and further development of FUROSCIX. Furthermore, the InvestingPro Tips highlight that analysts expect sales growth in the current year, which could be a positive driver for the company's future financial performance.
For investors seeking a more in-depth analysis, InvestingPro offers additional tips on scPharmaceuticals, which can be found at InvestingPro's SCPH page. The platform currently lists over 7 tips, providing valuable insights into the company's financial metrics and investment potential. With the next earnings date slated for August 12, 2024, stakeholders will be watching closely to see how these financial strategies play out in scPharmaceuticals' efforts to revolutionize heart failure treatment and realize its commercial goals.
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