Myriad Genetics Secures $200 Million Credit Facility with OrbiMed

Myriad Genetics has closed a five-year senior secured term loan credit facility with OrbiMed for up to $200 million. The facility includes $125 million of funded capital and an option to borrow an additional $75 million. This will support the company's growth strategy and replace its previous ABL facility.

Myriad Genetics (NASDAQ: MYGN) has closed a five-year senior secured term loan credit facility with OrbiMed, a leading global healthcare investment firm, for up to $200 million. The facility includes $125 million of funded capital with an option to borrow an additional $75 million until June 30, 2027. This new arrangement replaces Myriad's previous asset-based lending (ABL) facility and is secured by substantially all the assets of the company and its subsidiaries.

The loan matures on July 31, 2030, and the interest rate is based on the one-month SOFR plus 6.50% annually, with a SOFR floor of 2.50%. Given the current SOFR rate of 5.31%, Myriad's effective interest rate would be approximately 11.81%, indicating a relatively high cost of capital. This suggests lenders perceive some risk, though securing backing from a specialized healthcare investor like OrbiMed provides strategic validation.

The new credit facility provides Myriad with over $200 million in accessible capital to support its growth strategy. The company has stated that this funding will be used to execute its near-term objectives and long-term growth plan, which will be discussed in more detail during their upcoming second quarter earnings call.

OrbiMed's investment in Myriad is a vote of confidence in the company's expansion plans and product portfolio, particularly in molecular diagnostics and precision medicine. However, investors should note the significant interest expense that will impact future earnings. Myriad's chief financial officer, Scott Leffler, expressed excitement about the partnership, stating, "We value their insight and financial backing, which supports our ability to pursue our near-term objectives and long-term growth plan."

This move signals confidence in Myriad's ability to grow and expand its portfolio of diagnostic tests. The company's partnership with OrbiMed, a leading healthcare investment firm with over $17 billion in assets under management, underscores the strategic validation of Myriad's growth strategy.

References:
[1] https://www.stocktitan.net/news/MYGN/myriad-genetics-announces-new-200-million-credit-1g3rvxd1bjfp.html