Savara Secures Up to $200 Million in Non-Dilutive Debt Financing from Hercules Capital
Savara Inc., a clinical-stage biopharmaceutical company dedicated to developing innovative treatments for rare respiratory diseases, has announced a significant financial agreement with Hercules Capital, Inc. (NYSE: HTGC). The company has entered into a loan and security agreement that will provide up to $200 million in non-dilutive debt financing. This strategic move strengthens Savara’s financial position as it advances regulatory approvals and potential commercialization efforts for MOLBREEVI*, an investigational therapy for autoimmune pulmonary alveolar proteinosis (aPAP).
Strategic Importance of the Financing
The newly secured capital enhances Savara’s financial flexibility following its recent submission of a Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) for MOLBREEVI. If granted Priority Review status, MOLBREEVI could receive FDA approval by the end of the year. In parallel, Savara remains on track to submit a Marketing Authorization Application (MAA) for MOLBREEVI in Europe within the same timeframe.
Commenting on the financing agreement, Matt Pauls, Chair and Chief Executive Officer of Savara, expressed optimism about the company’s future trajectory:
“We’re pleased to partner with Hercules Capital as we work to get MOLBREEVI, a potential first-in-class therapy for aPAP, approved in the U.S. and Europe. This low-cost capital strategic financing further strengthens our financial position and provides additional flexibility following the BLA submission and as we prepare for a potential commercial launch of MOLBREEVI in the U.S.”
Hercules Capital, a leader in specialty financing for life sciences companies, recognizes the potential impact of MOLBREEVI. Tom Hertzberg, Managing Director at Hercules Capital, emphasized their support for Savara:
“We are proud to support Savara during this transformative time for the company. As Savara approaches their first potential approval with MOLBREEVI, providing this capital underscores our dedication and commitment to helping bring novel and life-changing therapies to market.”
Key Terms of the Loan Agreement
Under the agreement, Hercules Capital will provide funding in multiple tranches:
- An initial $30 million was funded immediately upon execution of the agreement, allowing Savara to repay its existing $26.5 million debt facility.
- An additional $100 million will become available upon FDA approval of MOLBREEVI, contingent on meeting specific regulatory and operational milestones.
- The final $70 million may be made available upon request by Savara and at the discretion of Hercules Capital.
The agreement includes a five-year maturity period and an interest-only repayment structure for the first 36 months. If MOLBREEVI secures FDA approval, the interest-only period may be extended to 60 months. Notably, the agreement does not include any warrants, ensuring that Savara retains full equity control while benefiting from the financial support.
Financial and Strategic Implications
This financing deal plays a crucial role in Savara’s broader strategy of bringing MOLBREEVI to market while maintaining financial stability. The additional capital allows the company to focus on key objectives, including:
- Regulatory Approval: Accelerating discussions with the FDA and European regulatory authorities to secure timely approvals.
- Commercial Readiness: Preparing for the potential U.S. launch of MOLBREEVI by investing in manufacturing, distribution, and commercialization infrastructure.
- Operational Flexibility: Ensuring financial stability without the immediate need for equity dilution, which protects shareholder value.
With non-dilutive financing in place, Savara can advance MOLBREEVI’s regulatory journey without resorting to additional stock offerings, which could dilute existing shareholders. This move aligns with Savara’s commitment to balancing financial prudence with clinical innovation.
MOLBREEVI: A Potential Breakthrough in aPAP Treatment
MOLBREEVI, Savara’s lead investigational candidate, represents a potential breakthrough for patients suffering from autoimmune pulmonary alveolar proteinosis (aPAP), a rare lung disorder characterized by the accumulation of surfactant in the alveoli, leading to impaired gas exchange and respiratory distress. Currently, the primary treatment option for aPAP involves whole lung lavage, an invasive and complex procedure. If approved, MOLBREEVI would offer a first-in-class pharmacological treatment option, addressing a significant unmet medical need.
Given the severity of aPAP and the lack of approved pharmacologic treatments, MOLBREEVI has the potential to significantly improve patient outcomes. The FDA’s decision on Priority Review status will be a critical factor in determining the speed of its approval process.
