BRISBANE, Calif., Feb. 3, 2015 (GLOBE NEWSWIRE) -- CareDx, Inc. (Nasdaq:CDNA), a molecular diagnostics company focused on the development and commercialization of clinically differentiated, high value, non‐invasive surveillance solutions for transplant recipients, today announced that it has entered into a secured credit facility for an aggregate $20 million, issuable in two tranches, with East West Bank. The credit facility replaces a prior credit facility from Oxford Finance and Silicon Valley Bank that was set to expire in 2016, which had approximately $10 million in remaining principal outstanding.
"Our new credit facility is larger than our previous loan, carries minimal financial covenants and provides greater flexibility for us in the future. In addition, it will add six to ten million dollars to our balance sheet, strengthening our financial position. We are pleased to be working with East West Bank," stated CareDx President and CEO Peter Maag.
"We are pleased to provide this loan to an innovation leader like CareDX to help them achieve their growth plans in the coming years," stated Mark Horn, Senior Managing Director, Technology, Private Equity and Life Sciences at East West Bank. "This is another example of how our life science team at East West Bank can be an effective financial partner for leading edge technology-rich companies."
Under the terms of the loan agreement, $20 million is available in two tranches, $16 million at closing, with an additional $4 million available if certain financial conditions are maintained during the initial six month period. The loan is secured by the tangible assets of the Company, and carries an initial annual interest rate of 5.25% that floats with the lender's Prime Rate. There are no pre-payment or final payment fees associated with the loan. The credit facility matures in December 2018. CareDx has also issued East West Bank a warrant to purchase 34,483 shares of the Company's common stock with an exercise price of $6.96 and a term of five years. Additional warrants will be issued to East West Bank if the second tranche is drawn, consistent with the warrant formula applicable to the initial tranche.
Armentum Partners served as advisor to CareDx for this financing. Armentum has advised on more than 40 debt or royalty transactions in the past 12 months representing roughly $1 billion in committed capital.
CareDx, Inc., based in Brisbane, California, is a molecular diagnostics company focused on the discovery, development and commercialization of clinically differentiated, high-value, non-invasive diagnostic surveillance solutions for transplant recipients. The Company has commercialized AlloMap®, a gene expression test that aids clinicians in identifying heart transplant recipients with stable graft function who have a low probability of moderate/severe acute cellular rejection. CareDx is also developing additional products for post-transplant monitoring of other solid organs that use a variety of technologies, including next generation sequencing to detect donor derived cell free DNA to monitor the health of organs after transplantation. The Company is currently investigating a research use only donor-derived cell free DNA-based test for heart transplant recipients. For more information, please visit: www.CareDxInc.com.
Forward Looking Statements
This press release contains forward-looking statements including, but not limited to statements regarding the Company's ability to raise capital, management's expectations regarding future expenses, development and commercial activities for our products and pipeline, including, but not limited to cell free DNA technology, and the adequacy and use of our cash resources. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Forward looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward looking statements, including CareDx's limited operating history and experience with developing new markets; risk relating to new partnerships and commercialization of those relationships, as well as other risks stated in CareDx's filings with the SEC located at www.sec.gov. CareDx disclaims any obligation to publicly update or revise any forward looking statements to reflect events that occur or circumstances that exist after the date on which they were made.