Healthcare investment fund Deerfield Management agreed to lend up to $100 million to ZymoGenetics in exchange for stock warrants and a potentially...
Healthcare investment fund Deerfield Management agreed to lend up to $100 million to ZymoGenetics in exchange for stock warrants and a potentially significant cut of Recothrom sales, the company said Monday.
Deerfield will provide the funding in $25 million segments that can be tapped by ZymoGenetics at anytime during the next 18 months. Each withdrawal will give Deerfield royalties amounting to 2 percent of sales for Recothrom, the Seattle biotech company’s only commercial product, and stock warrants. The borrowed funds, which accrue an interest of 4.9 percent, must be repaid in 2013.
ZymoGenetics will use the money to strengthen the commercial development of Recothrom, a genetically engineered protein that helps control surgical bleeding. The deal gives ZymoGenetics “access to a significant amount of capital at a competitive cost; there’s flexibility in the amount, timing and duration of borrowings, and shareholder dilution is minimized,” said Chief Financial Officer James Johnson.
Deerfield owns about 3 percent of ZymoGenetics’ stock.
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In mid-day trading ZymoGenetics stock was down 4 cents, or 0.5 percent, at $8.45.
Ángel González: 206-515-5644 or email@example.com