v3.25.2
Debt
 6 Months Ended
Jun. 30, 2025
Debt Disclosure [Abstract]  
Debt
10. Debt
Debt, long-term consists of the following commitments as of June 30, 2025 and December 31, 2024 (in thousands):
As of
June 30, 2025December 31, 2024
Convertible notes$— $567,164 
Term Loans538,508 536,218 
Debt, long-term$538,508 $1,103,382 
Convertible Notes
In May 2021, the Company completed an underwritten public offering of $575.0 million aggregate principal amount of the 2028 Convertible Notes, including the exercise in full of the underwriters' option to purchase an additional $75.0 million in aggregate principal amount of 2028 Convertible Notes. The Company's net proceeds from the offering, after deducting underwriting discounts and commissions and other offering expenses of $15.7 million, were approximately $559.3 million. The 2028 Convertible Notes bore interest payable semiannually in arrears on June 1 and December 1 of each year, beginning on December 1, 2021.
The 2028 Convertible Notes would have matured on June 1, 2028 but, on April 24, 2025, the Company issued a redemption notice for the 2028 Convertible Notes with a redemption date of June 6, 2025 (the Redemption Date). The Company elected to settle any conversions of the 2028 Convertible Notes that occurred on or before the business day prior to the Redemption Date in shares of the Company’s common stock.
Through April 24, 2025, holders of $5.5 million of aggregate principal amount of 2028 Convertible Notes elected to convert their notes into shares of the Company’s common stock at a conversion rate of 30.7692 shares of common stock per $1,000 principal amount of notes (equivalent to a conversion price of approximately $32.50 per share of common stock), resulting in an issuance of an aggregate of 168,944 shares of the Company's common stock. After April 24, 2025, holders of $567.5 million of aggregate principal amount of the then outstanding 2028 Convertible Notes elected to convert their notes into shares of the Company's common stock at a conversion rate of 31.2861 shares of common stock per $1,000 principal amount of notes (equivalent to a conversion price of approximately $31.96 per share of common stock), resulting in the issuance of an aggregate of 17,756,196 shares of the Company’s common stock. On the Redemption Date, all then outstanding 2028 Convertible Notes were redeemed at a redemption price equal to 100% of the principal amount of such 2028 Convertible Notes, plus accrued and unpaid interest on such 2028 Convertible Notes to, but excluding, the Redemption Date (the Redemption Price). For each $1,000.00 principal amount of 2028 Convertible Notes, the Redemption Price was equal to approximately $1,000.10.
The carrying value of the Company's convertible notes balance as of December 31, 2024 was $567.2 million, net of unamortized debt issuance costs of $7.8 million.
Secured Senior Term Loan
In October 2022, the Company entered into the $350.0 million loan agreement (the Loan Agreement) with Pharmakon Advisors, LP (Pharmakon) that would have matured on October 19, 2027 (the Tranche A Term Loan). The Tranche A Term Loan originally bore interest at a rate based upon the Secured Overnight Financing Rate (SOFR), subject to a SOFR floor of 2.5%, in addition to a margin of 7.75% per annum. Up to 50% of the interest payable during the first 24 months from the closing of the Tranche A Term Loan could have been paid-in-kind at the Company's election. If elected, paid-in-kind interest would have been capitalized and added to the principal amount of the Tranche A Term Loan. The Tranche A Term Loan, including the paid-in-kind interest, would have been repaid in eight equal quarterly payments starting in the 13th quarter following the closing of the Tranche A Term Loan (i.e., the quarter ending March 31, 2026), except that the repayment start date could have been extended at the Company's option for an additional four quarters, so that repayments start in the 17th quarter following the closing of the Tranche A Term Loan, subject to the achievement of specified ARIKAYCE data thresholds and certain other conditions. Net proceeds from the Tranche A Term Loan, after deducting the lenders' fees and deal expenses of $15.1 million, were $334.9 million.
Amended and Restated Loan Agreement
In October 2024, the Company entered into an Amended and Restated Loan Agreement (the A&R Loan Agreement) with BioPharma Credit PLC, BPCR Limited Partnership and BioPharma Credit Investments V (Master) LP, which are funds managed by Pharmakon, and the guarantors party to such agreement. The A&R Loan Agreement amended and restated the Loan Agreement to, among other items, add an additional $150.0 million senior secured term loan tranche (the Tranche B Term Loan and, together with the Tranche A Term Loan, the Term Loans). The A&R Loan Agreement extends the maturity of the Term Loans to September 30, 2029, subject to acceleration to February 1, 2028 on the occurrence of certain prespecified events, and amends the interest rate on the Term Loans to a fixed rate of 9.6% per annum. As consideration for the provision of the Tranche B Term Loan, the Company agreed to pay Pharmakon a fee equal to 2.0% of the Tranche B Term Loan at the closing date of the Tranche B Term Loan and an additional exit fee of 2.0% of the amount of each prepayment or repayment of the Term Loans. The Term Loans will be repaid in eight equal quarterly payments starting on January 3, 2028. Net proceeds from the Tranche B Term Loan, after deducting the lenders' fees and administrative expenses of $3.7 million, were $146.3 million.

The Company evaluated whether the A&R Loan Agreement represented a debt modification or extinguishment in accordance with ASC 470-50, Debt – Modifications and Extinguishments. As the present value of the cash flows under the terms of the A&R Loan Agreement was less than 10% different from the remaining cash flows under the terms of the Tranche A Term Loan, the A&R Loan Agreement was accounted for as a debt modification. The unamortized balance of debt issuance costs incurred in connection with the Term Loans are being amortized through September 2029 utilizing the effective interest rate method. The effective interest rate of the Term Loans was 10.6% at modification.
The following table presents the carrying value of the Company’s Term Loans balance as of June 30, 2025 and December 31, 2024 (in thousands):
As of
June 30, 2025December 31, 2024
Principal$500,000 $500,000 
Paid-in-kind interest capitalized46,770 46,770 
Debt discount, net(8,262)(10,552)
Term Loans$538,508 $536,218 
As of June 30, 2025, future principal repayments of debt for each of the years through maturity were as follows (in thousands):
 
Year Ending December 31: 
2025$— 
2026— 
2027— 
2028341,731 
2029205,039 
2030 and thereafter— 
 $546,770 
Interest Expense
Interest expense related to debt and finance leases for the three and six months ended June 30, 2025 and 2024 is as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Convertible debt contractual interest expense$600 $2,062 $1,678 $4,125 
Term Loans contractual interest expense13,269 12,658 26,391 25,141 
Royalty Financing Agreement interest expense5,192 4,893 10,215 9,715 
Amortization of debt issuance costs1,676 1,800 3,498 3,651 
Swap interest income— (710)— (1,464)
   Total debt interest expense20,737 20,703 $41,782 $41,168 
Finance lease interest expense508 564 1,032 1,141 
   Total interest expense$21,245 $21,267 $42,814 $42,309