X4 Pharmaceuticals Takes Up To $150 Million K2 Loan, Pays Off $75 Million Hercules Principal

X4 Pharmaceuticals entered a loan agreement with K2 HealthVentures for up to $150.0 million, and used the first $80.0 million to repay its Hercules Capital debt in full, according to an 8-K covering events of October 7. The agreement runs to October 1, 2030 and carries cash and revenue covenants plus a lender option to convert $15.0 million into stock.

What the 8-K says

The $80.0 million first tranche funded at closing. A further $70.0 million may be offered at X4's request, but only after the agent reviews information from X4 and the lenders give discretionary approval.

The Hercules payoff was about $78.7 million. The filing says that covered $75.0 million of principal, accrued interest, an end-of-term charge, a prepayment charge and related fees. Hercules' liens were released, and warrants previously issued to Hercules and its affiliates remain outstanding.

The loans pay cash interest at the greater of 8.55% or the prime rate plus 1.55%, plus 1.0% a year in paid-in-kind interest (interest added to the balance). Payments are interest-only through October 1, 2029, and that period extends to maturity if X4 achieves first U.S. commercial sales of mavorixafor in moderate to severe chronic neutropenia, among other conditions. The loans are secured by substantially all assets other than intellectual property.

Covenants and the conversion option

Starting October 1, 2027, whenever X4's market capitalization is below $800.0 million, it must hold unrestricted cash of at least 75% of total outstanding obligations. That threshold falls to 40% once certain conditions are met.

Starting April 1, 2029, X4 must reach trailing three-month net product revenue of at least 50% of the figure in its board-approved projections.

K2 may convert up to $15.0 million of principal into common stock at $3.2341 per share. That is above the $2.79 regular-session close on Thursday (market data). The new shares would be issued under a private-placement exemption.

What the company says

In the press release, X4 said the facility has a larger total size, a longer interest-only period and a 48-month maturity. Chief Financial Officer David Kirske said the structure offers "additional flexibility on more favorable terms."

The release lists risks including failure to meet the minimum cash and revenue covenants, and no extension of interest-only payments if first U.S. sales in chronic neutropenia come late.

X4 expects to finish enrollment in its Phase 3 4WARD trial by year-end 2026, with topline data in the first half of 2028.

Sources

• 8-K Filing — X4 Pharmaceuticals, Inc (XFOR) — SEC EDGAR
• Exhibit ex991pressreleasedatedocto.htm — X4 Pharmaceuticals, Inc 8-K exhibit — SEC EDGAR
• X4 Pharmaceuticals Secures Up to $150 Million Senior Debt — globenewswire.com