Tarsus Pharmaceuticals refinances existing debt with $200M financing

Tarsus Pharmaceuticals announced that it has secured $200 million in committed capital from funds associated with Pharmakon Advisors, LP. Tarsus has elected to draw $75 million on the closing date, April 19, 2024, with the remaining $125 million of committed capital available at the company’s option in three tranches through specified time windows, the last ending in December 2025. Net proceeds to the Company at closing will be approximately $40 million following the repayment of the existing credit facility, as well as fees and expenses associated with the transaction. The new five-year interest-only credit facility with Pharmakon provides for three potential additional loan tranches, to be drawn at the Company’s option, in principal amounts up to $25 million, $50 million and $50 million, respectively, the latter two tranches available upon achievement of certain revenue thresholds. The credit facility bears interest at a floating rate based upon the secured overnight financing rate, plus a margin of 6.75% per annum. SOFR is subject to a 3.75% floor. Interest on the funded loan is paid quarterly in arrears until April 19, 2029, the Maturity Date, with the unpaid principal amount of the outstanding loan due and payable on the Maturity Date. There is no warrant coverage to the lenders and no financial covenants associated with the financing. Pharmakon Advisors, LP is a leading investor in non-dilutive debt for the life sciences industry and is the investment manager of the BioPharma Credit funds. Established in 2009, funds managed by Pharmakon Advisors, LP have committed $7.8 billion across 51 investments. Armentum Partners served as Tarsus’ financial advisor on this transaction.