Myriad Genetics Secures $200 Million Credit Facility from OrbiMed to Fuel Growth Strategy
Key Insights
Myriad Genetics (search) closed a five-year senior secured term loan credit facility with OrbiMed (search) providing up to $200 million of capital, including $125 million of funded capital and an option to borrow an additional $75 million until June 30, 2027.
The facility matures on July 31, 2030, and bears interest at a rate based on the one-month SOFR plus 6.50% per year, with a SOFR floor of 2.50%, resulting in an effective interest rate of approximately 11.81%.
This new arrangement replaces Myriad's previous asset-based lending facility and provides the molecular diagnostics company with over $200 million in accessible capital to support its growth strategy in precision medicine.
Myriad Genetics (search), a leader in molecular diagnostic testing and precision medicine, has closed a five-year senior secured term loan credit facility providing up to $200 million of capital from OrbiMed (search), a leading global healthcare investment firm. The facility includes $125 million of funded capital with an option to borrow up to an additional $75 million until June 30, 2027.
The loan matures on July 31, 2030, and bears interest at a rate based upon the one-month secured overnight financing rate (SOFR) plus 6.50% per year, subject to a SOFR floor of 2.50% per year. Given the current SOFR rate of 5.31%, Myriad's effective interest rate would be approximately 11.81%.
Strategic Partnership and Growth Plans
"We are excited to partner with OrbiMed (search), a leading global healthcare investment firm. We value their insight and financial backing, which supports our ability to pursue our near-term objectives and long-term growth plan," said Scott Leffler, chief financial officer of Myriad Genetics (search). "Between this credit facility and our cash and cash equivalents, we now have access to more than $200 million in capital to support the company's growth strategy, which we will speak to in more detail on our upcoming second quarter earnings call."
Matthew Rizzo, General Partner of OrbiMed (search), expressed confidence in the partnership, stating, "We are pleased to partner with Myriad to support the company's growth strategy. We believe Myriad's portfolio of diagnostic tests provide critical insights that enable healthcare providers to deliver better care to patients."
Financial Structure and Terms
The new credit facility with OrbiMed (search) replaces Myriad's previous ABL facility and is secured by substantially all the assets of Myriad Genetics (search) and its subsidiaries. The relatively high cost of capital suggests lenders perceive some risk, though securing backing from a specialized healthcare investor like OrbiMed provides strategic validation for the company's expansion plans.
OrbiMed (search)'s investment represents a vote of confidence in Myriad's expansion plans and product portfolio, particularly in molecular diagnostics and precision medicine. The healthcare investment firm manages over $17 billion in assets under management, underscoring the strategic validation of Myriad's growth strategy.
Evercore (search) served as exclusive financial advisor to Myriad Genetics (search) on this transaction. The company has indicated that this funding will be used to execute its near-term objectives and long-term growth plan, with more details to be provided during their upcoming second quarter earnings call.