Bluebird Bio secures up to $175M in debt financing

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Bluebird Bio has secured up to $175 million in debt financing with Hercules Capital, having entered into a five-year term loan facility that provides for the funds in separate tranches.

The first tranche of $75 million was drawn upon the closing of the transaction. Under the terms of the agreement, Bluebird will be eligible to draw two more tranches of $25 million each, subject to the achievement of certain commercial milestones. An additional tranche of $50 million may be available at Hercules' discretion.

Bluebird will be responsible for paying only the interest on any amounts borrowed for the first three years of the term; any outstanding balance as of April 1, 2027, will be amortized over the remaining two years of the loan.

J. Wood Capital Advisors acted as financial adviser to Bluebird, with Latham & Watkins LLP serving as legal counsel. DLA Piper served as legal counsel to Hercules.

According to a statement from Bluebird Bio, additional details of the loan agreement will be filed with the U.S. Securities and Exchange Commission.

The funding, which the firm anticipates will extend its cash runway beyond the next 24 months, comes a week after Bluebird signed its first outcomes-based Medicaid agreement with the state of Michigan for its sickle-cell disease (SCD) gene therapy Lyfgenia, which was approved by the U.S. Food and Drug Administration (FDA) in December. Lyfgenia is one of three FDA-approved gene therapies Bluebird is commercially launching; the other two are Zynteglo for transfusion-dependent beta thalassemia and Skysona for cerebral adrenoleukodystrophy, both of which were approved by the FDA in 2022.

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