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RegMedInvestors (RMi) Research Note – finance: bluebird bio (BLUE)Secures up to $175 M Debt Financing with Hercules Capital

March 18, 2024 9:37am

Blue closed up, Friday +$0.09 to $1.42 and is up +$0.03 or +2.115 pre-open

Funding expected to extend BLUE’s cash runway until Q1/26

$75 million was drawn down upon closing; BLUE will be eligible to draw an additional $50 million subject to achievement of commercial milestones -

The term loan facility provides for up to $175 million of term loans in aggregate, available in four tranches. Upon closing of the transaction, the first tranche of $75 million was drawn.

Under the terms of the agreement, bluebird will be eligible to draw two additional tranches of $25 million each, subject to the achievement of commercial milestones.

The Bottom Line: Wasn't ever a chance for a public offering thus the debt market - ug but, they'll be alive.

Based on launch trajectory and current business plans, and assuming three tranches totaling $125 million are executed, the transaction is expected to extend BLUE’s cash runway through Q1/26.

A fourth tranche of up to $50 million may be available at the sole discretion of Hercules.

During the first three years of the five-year term, the Company will be responsible for paying only the interest on any amounts borrowed; any outstanding balance as of April 1, 2027 will be amortized over the remaining life of the loan.

J. Wood Capital Advisors acted as sole financial advisor to the Company. Latham & Watkins LLP served as legal counsel to bluebird and DLA Piper served as legal counsel to Hercules.

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