Pennsylvania device maker Unilife (NSDQ:UNIS) raised $60 million through a debt financing agreement with OrbiMed Advisors, news of which sent UNIS shares soaring today.
Unilife plans to use the funds to support commercial efforts tied to "several large contracts" that Unilife holds with its customers.
Unilife secured $40 million at the close of the deal, with the rest coming in a pair of payments in December 2014 and June 2015. The decision to take the funds in tranches allows the company to minimize its interest payments, chairman & CEO Alan Shortall said in prepared remarks.
The terms of the financing provide for 6 years of interest-only payments at a rate of 10.25% per annum. The principal is slated for repayment by March 12, 2020, according to a company statement.
OrbiMed, a healthcare-only investment group, will also receive tiered royalty payments calculated based on net sales, maxing out at 2.75% of annual net revenue. Unilife retains the option to buy out the royalty agreement, the company said.
"We believe this agreement represents a significant endorsement of Unilife," Shortall said. "In particular, I believe OrbiMed’s decision to accept a small share of our future net sales highlights their confidence in our business model and future growth."
News of the financing sent Unilife shares skyrocketing today. UNIS shares were up more than 15%, trading at $5 as of about 3:31 p.m. The stock has gained 11% since the start of the year.
