Latham Advises on Karyopharm’s Significant Refinancing and Amended Royalty Agreement
Karyopharm Therapeutics Inc. (Nasdaq: KPTI), a commercial-stage pharmaceutical company pioneering novel cancer therapies, has announced that it has entered into a series of financing transactions that will extend the Company's debt maturities into 2028 and 2029, well beyond the Company's planned Phase 3 data readouts in 2025. As part of these refinancing transactions, on May 8, 2024, the Company entered into privately negotiated agreements with certain funds managed by the top four holders of the Company's outstanding 3.0% Convertible Notes due 2025 (the 2025 Convertible Notes) to exchange convertible notes for a combination of new convertible notes and warrants to purchase up to 46 million shares of the company’s common stock.
The Company also entered into a new US$100.0 million first lien senior secured term loan facility (the Secured Term Loan). The lenders under the Secured Term Loan include certain holders of the 2025 Convertible Notes and HealthCare Royalty Management, LLC (HCRx). Karyopharm intends to use US$49.5 million of the proceeds from the Secured Term Loan to repay royalty payment obligations owed to HCRx under its existing Revenue Interest Financing Agreement. The remainder of the proceeds of approximately US$30.0 million from the Secured Term Loan are intended to be used to pay transaction expenses and for general corporate purposes, including to support the Company's ongoing and planned clinical trial activities.
Latham & Watkins LLP represented the lenders and bondholders in the transaction with a multidisciplinary team led by New York partners David Hammerman and Peter Sluka. Advice on capital markets matters was provided by New York partner Eric Rice, with associate Sloan Ungerman; on finance matters by Houston counsel Bryce Kaufman, with associate Joanna Zhao; on ERISA matters by New York partner Austin Ozawa; on tax matters by New York partner Bora Bozkurt, with associate Sam Yang; on intellectual property matters by New York partner Herman Yue, with associate Dewey Kang; and on uniform commercial code matters by New York partner Brian Rock.