Amidst the on­go­ing biotech mar­ket slow­down, com­pa­nies are try­ing var­i­ous ways to stay afloat. Some are go­ing pub­lic, and some are tak­ing on debt.

The newest en­trant to the bor­row­ers’ club is New Jer­sey-based Proven­tion Bio, which has se­cured a term loan fa­cil­i­ty of up to $125 mil­lion with Her­cules Cap­i­tal.

The fund­ing will be avail­able in five tranch­es, with the first tranche of $25 mil­lion drawn at clos­ing. The com­pa­ny has the op­tion to draw the sec­ond tranche of $40 mil­lion up­on ap­proval of teplizum­ab, sub­ject to cer­tain con­di­tions.

Teplizum­ab is an ex­per­i­men­tal an­ti-CD3 mon­o­clon­al an­ti­body in­tend­ed to de­lay clin­i­cal type 1 di­a­betes in at-risk peo­ple. The com­pa­ny in-li­censed the drug from Macro­Gen­ics af­ter Eli Lil­ly dumped it as it had failed in a piv­otal di­a­betes study.

In Ju­ly 2021, the FDA is­sued a com­plete re­sponse let­ter to Proven­tion, say­ing that the com­mer­cial pro­duc­tion of teplizum­ab had failed to show phar­ma­co­ki­net­ic com­pa­ra­bil­i­ty with the drug sub­stance man­u­fac­tured for clin­i­cal tri­als.

How­ev­er, the com­pa­ny is hop­ing that the drug will make it to the mar­ket this year. This Ju­ly, Proven­tion an­nounced that the FDA has ex­tend­ed its re­view pe­ri­od by three months for the BLA for teplizum­ab.

Thier­ry Chauche

“This term loan fa­cil­i­ty sig­nif­i­cant­ly strength­ens our bal­ance sheet ahead of teplizum­ab’s po­ten­tial com­mer­cial launch and pro­vides the Com­pa­ny with ad­di­tion­al fi­nan­cial flex­i­bil­i­ty as we con­tin­ue to work to change the land­scape for pa­tients with type 1 di­a­betes,” said the com­pa­ny’s CFO, Thier­ry Chauche, in a press state­ment.

Mean­while, the third and fourth tranch­es will com­bine for $35 mil­lion in the ag­gre­gate, sub­ject to sat­is­fac­tion of cer­tain un­spec­i­fied con­di­tions. And the avail­abil­i­ty of the fifth tranche of up to $25 mil­lion is sub­ject to the ap­proval of the lenders.

Proven­tion joins a list of com­pa­nies that are re­sort­ing to bor­row­ing loans to sus­tain their op­er­a­tions and push their pipeline. For ex­am­ple, Al­ladapt Im­munother­a­peu­tics, which fo­cus­es on IgE-me­di­at­ed food al­ler­gies, en­tered in­to a loan agree­ment with Her­cules Cap­i­tal for up to $50 mil­lion ear­li­er this week. The funds will be used to sup­port the clin­i­cal de­vel­op­ment of Al­ladapt’s lead as­set, ADP101, through the ini­ti­a­tion of a Phase III tri­al, as well as the com­ple­tion of its man­u­fac­tur­ing fa­cil­i­ty, the com­pa­ny an­nounced.

Atai Life Sci­ences, which de­vel­ops treat­ments for men­tal health dis­or­ders, al­so took a loan of $175 mil­lion with Her­cules Cap­i­tal last month. The com­pa­ny drew $15 mil­lion at clos­ing and has the op­tion to draw an­oth­er $45 mil­lion, split across two tranch­es, next year. The new funds would be used to de­vel­op its pipeline which in­cludes psilo­cy­bin ther­a­py.

DC District Court Judge Christopher Cooper today granted Vanda Pharma’s request to require the FDA to disclose more info on the complete response letter for its sleep disorder drug Hetlioz.

The melatonin receptor agonist is approved by the FDA to treat non-24-hour sleep-wake disorder, a circadian rhythm disorder. But in 2018 Vanda filed a supplemental application to market Hetlioz as a treatment for jet lag, which the FDA rejected in August 2019, with few details on what Vanda needed to correct course, according to the company.