RE:RE:RE:RE:nice jump After more digging, here is what I understand in regards to finances, so $51M in cash less $18M in payments to Merck and there is the $15M Solar loan that starts payments soon unless these can be pushed out. Merck will be keeping a close eye on the Ph 3 tests and might try to put some pressure on the team. I would like to see the Solar loan renegotiated to remove the short lease that seems to be in place.
1) There is some uncertainty around the breakdown and timing for the $19M payments to Merck but it seems that the company has factored this into its 2020 runway projections. I would expect it to be weighted towards marketing approvals. From the end-Sep Q10 report, I would expect the company to comment on what Merck is expecting for payments in 2019 and 2020 for our awareness and I would imagine that it would be factored into each of the potential applications which should spread out the payments over several years.
As of September 30, 2018, the Company had a license arrangement with Merck Sharp & Dohme Corp., or Merck, that involves potential future expenditures. Under the license arrangement, the Company exclusively licensed from Merck its rights to ibrexafungerp in the field of human health. Ibrexafungerp is the Company's lead product candidate. Pursuant to the terms of the license agreement, Merck is eligible to receive milestone payments from the Company that could total $19.0 million upon occurrence of specific events, including initiation of a Phase 3 clinical study, new drug application, and marketing approvals in each of the U.S., major European markets and Japan. In addition, Merck is eligible to receive tiered royalties from the Company based on a percentage of worldwide net sales of ibrexafungerp. The aggregate royalty percentages are mid- to high-single digits. In December 2016 and January 2018, the Company entered into second and third amendments, respectively, to the license agreement with Merck which clarified what would constitute the initiation of a Phase 3 clinical trial for the purpose of milestone payment. Except as described above, all other terms and provisions of the license agreement remain in full force and effect. 2) Solar loans of $15M were renegotiated in October so the repayments are pushed out to Apr 1, 2019. On September 30, 2016, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Solar, in its capacity as administrative and collateral agent and as lender. Pursuant to the Loan Agreement, Solar is providing the Company with a 48-month secured Term Loan in the amount of $15.0 million. The Term Loan bears interest at a floating rate equal to the LIBOR rate in effect plus 8.49% and the Company was required to make interest-only payments on the Term Loan beginning November 1, 2016 through March 1, 2018. Beginning April 1, 2018, the Company was required to make monthly payments of interest plus equal monthly principal payments from April 1, 2018 through September 30, 2020 (the “Maturity Date”). In March 2018, the Loan Agreement was amended and the Company was required to make monthly payments of interest plus equal monthly principal payments from October 1, 2018 through the Maturity Date of the Term Loan. On October 1, 2018, the Company entered into a second amendment to the Loan Agreement and the Company is required to make interest plus equal monthly principal payments from April 1, 2019 through the Maturity Date of the Term Loan. The final fee payable at the Maturity Date was increased by $0.1 million and if the Company obtains certain cash proceeds, the Maturity Date of the Loan Agreement may be extended to March 30, 2021. Except as described above, all other terms and provisions of the Loan Agreement remain materially in full force and effect. The obligations under the Loan Agreement are secured by a lien on substantially all assets of the Company other than its intellectual property, which is subject to a negative pledge.