CFO Intelligence Magazine – Spring 2023
Emily Hill
PTC Therapeutics CFO
When PTC Therapeutics, Inc. launched a search for financing that would support the company’s goal of delivering at least one therapy every two to three years on a steady basis, “We wanted to ensure that the process would be competitive, and would identify a long-term, strategic partner,” recalls CFO Emily Hill. “An agreement with Blackstone Life Sciences and Blackstone Credit that could provide us with up to $1 billion was structured, providing us with an attractive cost of capital while limiting dilution.
Announced in October 2022, the potentially record-breaking deal includes a specific tranche of $500 million in credit facilities or other investment capital to fund future business development. Hill notes that this latest financing arrangement — which is secured by royalties on PTC’s existing drugs Translarna, Emflaza, and Upstaza, and registrational-stage assets sepiapterin, and vatiquinone — fits in nicely with the company’s mixture of equity, loan and convertible debt financing.
“Depending on the final realization, this could be our largest post-IPO financing to date,” observes Hill. “The timing was appropriate, as the visibility in our future revenues allows us to secure a lower cost of capital on a limited collateral basket. Now, with multiple commercial products we have the revenue stream to support the royalty financing structure.”
The Blackstone financing includes $300 million of senior secured debt at 7.25% + SOFR (Secured Overnight Financing Rate ) for a seven-year term; a $50 million purchase of PTC common stock; $150 million in delayed draw debt for up to 18 months, and — subject to mutual agreement between Blackstone and PTC — $500 million in potential credit facility or other investment capital to support business development opportunities.
“This structure was ideal because it involved limited collateral, which enables us to remain nimble, and a term length that matches our drug-development timeline,” she adds. “And we have high regard for Blackstone, which is positive for a long-term partnership. Compared to the kinds of financing structures that many of our peers have utilized, this deal offers us considerable freedom. The long-term component offers certainty and stability, while enabling us to take advantage of potential strategic developments; and the flexibility of the drawdown offers the opportunity of financing for future product launches.”