HAYWARD, Calif. - Arcus Biosciences, Inc. (NYSE:RCUS), a clinical-stage biopharmaceutical company, announced today that it has secured a $250 million term loan facility with Hercules Capital, Inc. (NYSE: NYSE:HTGC). This capital infusion is intended to enhance the company's financial position and advance the development of its cancer treatment candidate, casdatifan.
The loan agreement provides Arcus immediate access to $50 million, with the option to draw an additional $100 million at its discretion. Another tranche of $100 million is conditionally available for strategic initiatives, pending approval from Hercules. The facility carries a five-year maturity that can be extended to six years contingent upon the progress of casdatifan and another candidate, quemliclustat, into Phase 3 trials.
Arcus's CEO, Terry Rosen, Ph.D., noted the importance of the non-dilutive capital in accelerating the development program for casdatifan, particularly in clear cell renal cell carcinoma (ccRCC). Data from the ongoing Phase 1/1b study of casdatifan, ARC-20, is expected to be presented later this year.
Hercules Capital expressed their support for Arcus's oncology pipeline through this financial partnership, which aims to assist the company in achieving its strategic objectives.
The term loan is secured against the company's assets, with certain exclusions pertaining to existing collaboration agreements. The interest-only period spans four years and could extend to five years upon reaching specific regulatory milestones.
Arcus Biosciences specializes in developing treatments for cancer, with a focus on differentiated molecules and combination therapies. The company's investigational medicines target various biological pathways and are currently undergoing clinical studies.
This financial development comes as Arcus continues to progress through clinical trials with its investigational products, including casdatifan and others, none of which have yet received regulatory approval or established safety and efficacy.
The information disclosed in this article is based on a press release statement from Arcus Biosciences.
In other recent news, Hercules Capital, Inc. has made significant strides in its financial performance and operations. The Maryland-based specialty finance company recently received shareholder approval to issue shares of its common stock below its net asset value (NAV), a move that lends flexibility in raising capital. This development came during a reconvened Annual Meeting of Stockholders.
In addition to this, Hercules Capital reported record total gross funding of $461.5 million for the second quarter of 2024, contributing to a total of $1.07 billion for the first half of the year. The company's asset management also saw an uptick, increasing by 14.7% year-over-year to approximately $4.6 billion.
Despite the anticipation of higher market volatility, Hercules Capital plans to maintain a defensive yet flexible approach to seize market opportunities. The company reported a return on equity of 19.2% for Q2 and ended the quarter with a strong liquidity position of $482 million. However, the company's net asset value per share saw a slight decrease by 1.7% from the previous quarter. These recent developments underscore Hercules Capital's ongoing efforts to enhance its operational and financial performance.
InvestingPro Insights
Hercules Capital, Inc. (NYSE: HTGC), the provider of the term loan facility to Arcus Biosciences, has been a significant player in the investment market with a market capitalization of $3 billion. As a business development company, Hercules Capital has a track record of supporting growth-stage companies, much like Arcus Biosciences, with their financial needs.
One of the key InvestingPro Tips for Hercules Capital is its notable dividend yield, which stands at an impressive 10.39%. This is a testament to the company's commitment to returning value to its shareholders, having maintained dividend payments for 20 consecutive years. This aspect could be particularly appealing to income-focused investors considering Hercules Capital's stock.
From a financial performance standpoint, Hercules Capital has exhibited a solid revenue growth of 19.76% over the last twelve months as of Q2 2024, with a gross profit margin maintaining at 100%. The company's ability to sustain profitability over the last twelve months, coupled with a strong 25.16% one-year price total return, underscores its financial health and operational efficiency.
However, potential investors should note that Hercules Capital's short-term obligations currently exceed its liquid assets, which could indicate a need for careful cash management in the near future. This, along with the fact that four analysts have revised their earnings downwards for the upcoming period, suggests that investors may want to keep a close eye on the company's forthcoming financial reports for any signs of changing tides.
For those interested in a deeper dive into Hercules Capital's financials and future prospects, there are additional InvestingPro Tips available on https://www.investing.com/pro/HTGC, which could provide further insights into making an informed investment decision.
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