DEBT |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DEBT | DEBT Loan and Security Agreement with Hercules Capital, Inc. In April 2022, the Company entered into a loan and security agreement (the “Hercules Loan and Security Agreement”) among the Company, certain of its subsidiaries from time to time party thereto (together with the Company, collectively, the “Borrower”), Hercules Capital, Inc. (“Hercules”) and certain other lenders named therein (the “Lenders”). Under the Hercules Loan and Security Agreement, the Lenders provided the Company with access to a term loan with an aggregate principal amount of up to $75.0 million, in four tranches (collectively the “Term Loan”), including an initial tranche of $25.0 million, which was available to the Company through June 15, 2023. Upon signing the Hercules Loan and Security Agreement, the Company drew an initial principal amount of $5.0 million (the “initial draw”). The Company was originally obligated to make interest-only payments through April 1, 2024, which was extended to October 1, 2024 upon achievement of a development milestone in August 2022. In August 2023, the Company executed an amendment to the Hercules Loan and Security Agreement (the “Hercules Amendment”) to modify certain terms of the agreement and increase the aggregate principal amount of up to $150.0 million. Upon execution of the Hercules Amendment, the Company drew a principal amount of $15.0 million. Under the Hercules Amendment, the Lenders provided the Company access to an increased term loan with an aggregate principal amount of up to $150.0 million, in four tranches (collectively the “Amended Term Loan”), consisting of (1) an initial tranche of $50.0 million, $5.0 million of which was drawn at closing of the Hercules Loan and Security Agreement in April 2022, $15.0 million of which was drawn at closing of the Hercules Amendment in August 2023, $5.0 million of which was available through December 15, 2023, and $25.0 million of which was available from July 1, 2024 through December 15, 2024; (2) a second tranche of $20.0 million, subject to achievement of certain regulatory milestones, which was available through February 15, 2025; (3) a third tranche of $20.0 million, subject to achievement of certain regulatory milestones, which was available through March 31, 2025; and (4) a fourth tranche of $60.0 million subject to approval by the Lenders’ investment committee(s), available through June 15, 2025. The obligations of the Borrower under the Hercules Amendment agreement are secured by substantially all of the assets of the Borrower, excluding the Borrower’s intellectual property. The Amended Term Loan has a maturity date of October 1, 2026. The Amended Term Loan bears interest at a floating per annum rate equal to the greater of (i) 7.45% and (ii) 4.2% above the Prime Rate (as defined therein), provided that the Amended Term Loan interest rate shall not exceed a per annum rate of 8.95%. Interest is payable monthly in arrears on the first day of each month. The interest rate as of March 31, 2025 was 8.95%. Per the terms of the Hercules Amendment, the Company was originally obligated to make interest-only payments through April 1, 2025. Upon achievement of certain development milestones related to topline results for the Company’s phase 3 THRIVE trial in September 2024, the interest-only period was extended to October 1, 2025. Upon achievement of additional development milestones related to topline results for the Company’s phase 3 THRIVE-2 trial in December 2024, the interest-only period was further extended to April 1, 2026. The Borrower is required to repay the Amended Term Loan amount in equal monthly installments of the principal amount and interest between the end of the interest-only period and the maturity date of October 1, 2026. In addition, the Borrower is required to pay an end-of-term fee equal to 6% of the principal amount of funded Amended Term Loan advances at maturity, which are being accreted as additional interest expense over the term of the loan. The total cost of all items (cash interest and the end-of-term fee) is being recognized as interest expense using an effective interest rate of approximately 9.3%. The Company recorded interest expense of $0.6 million during the three months ended March 31, 2025 and 2024. The following table summarizes the components of the Amended Term Loan, on the Company’s condensed consolidated balance sheet at March 31, 2025:
The carrying value of the Amended Term Loan approximates its fair value. Future principal payments, which exclude the end of term fee, in connection with the Amended Term Loan as of March 31, 2025 are as follows (in thousands):
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