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Financing Agreement | 6 Months Ended
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Mar. 31, 2025
Debt Disclosure [Abstract] |
Financing Agreement | FINANCING AGREEMENT On August 7, 2024 (the “Closing Date”), the Company entered into the Financing Agreement with the guarantors party thereto, the lenders party thereto (the “Lenders”), and Sixth Street Lending Partners (“Sixth Street”), as the administrative agent and collateral agent for the Lenders. The Financing Agreement establishes a senior secured term loan facility of $500.0 million (the “Credit Facility”), consisting of $400.0 million funded on the Closing Date and an additional $100.0 million available at the Company’s option, subject to mutual agreement with Sixth Street, over the seven-year term. The loans under the Credit Facility bear interest at an annual rate 15.0%, and the interest is paid in kind and added to the outstanding principal balance of the Credit Facility each period. The outstanding principal balance of this Credit Facility, including amounts representing accrued but unpaid interest previously paid in kind, is due and payable on August 7, 2031. The Company is permitted to use the net proceeds for working capital, capital expenditures and general corporate purposes of the Company and its subsidiaries. The Company will have the right to prepay loans under the Credit Facility at any time. The Company is required to partially repay loans under the Credit Facility with proceeds from certain asset sales, condemnation events and extraordinary receipts, subject, in some cases, to reinvestment rights. If the Company repays in full the aggregate principal outstanding under the Credit Facility and such payment in full occurs on or prior to August 7, 2028, the Company will be required to make an additional payment to the lenders under the Credit Facility on such date in an amount necessary for the lenders to achieve a multiple of two times on invested capital of the aggregate principal amount funded on the Closing Date. If such payment in full occurs after August 7, 2028, the Company will be required to make an additional payment to the lenders under the Credit Facility on such date in an amount necessary for the lenders to achieve the greater of the multiple of two times on invested capital of the aggregate principal amount funded on the Closing Date and the present value of all interest payments that would have been payable from such date through the maturity date of the Credit Facility. On November 26, 2024, the Company entered into an amendment to the Financing Agreement (the "Amendment") to modify, amongst other things, some of the prepayment terms of the loans under the Credit Facility, including, the prepayment terms related to the Sarepta Collaboration Agreement. The Amendment was effective on February 14, 2025, following the closing of the Sarepta Collaboration Agreement and receipt of the $500.0 million upfront payment from Sarepta. As a result, the Company paid $150.0 million of the loans under the Credit Facility during the second quarter of fiscal 2025. The Amendment was accounted for as a debt modification under ASC 470-50, “Debt—Modification and extinguishments” since the amendment did not result in substantially different terms. In connection with the Amendment, the Company did not incur significant third-party fees. The Company also paid $1.6 million during the second quarter of fiscal 2025, representing 65% of the milestone payments from GSK under the Credit Facility term. See Note 2. All obligations under the Financing Agreement will be secured on a first-priority basis, subject to certain exceptions, by security interests in substantially all assets of the Company and material subsidiaries of the Company, including its intellectual property, and will be guaranteed by material subsidiaries of the Company, including foreign subsidiaries, subject to certain exceptions. The Financing Agreement contains customary covenants, including, without limitation, a financial covenant to maintain liquidity (cash, cash equivalents and investments) of at least $100.0 million if the Company’s market capitalization is above $1.5 billion, and negative covenants that, subject to certain exceptions, restrict indebtedness, liens, investments (including acquisitions), fundamental changes, asset sales and licensing transactions, dividends, modifications to material agreements, payment of subordinated indebtedness, and other matters customarily restricted in such agreements. The Company is subject to restrictions on sales and licensing transactions with respect to certain core intellectual property, subject to certain exceptions, including certain transactions related to areas outside the United States, United Kingdom, European Union, Japan and China. The Financing Agreement contains certain embedded features that were identified and evaluated as not material to the consolidated financial statements. The outstanding balance of the Credit Facility consisted of the following:
|  | March 31, 2025 |  | September 30, 2024
|  | (in thousands)
Initial Term Loan |  | $ | 400,000 |  |  | $ | 400,000 |
Accumulated interest on the Initial Term Loan |  | 39,687 |  |  | 9,000 |
Less: Unamortized debt discount and issuance costs |  | (14,135) |  |  | (15,817) |
Less: Current portion of credit facility |  | (65,000) |  |  | — |
Less: Payments |  | (151,625) |  |  | — |
Credit facility, net of current portion |  | $ | 208,927 |  |  | $ | 393,183 |
The following table sets forth total interest expense recognized related to the Credit Facility:
|  | Three Months Ended March 31, |  | Six Months Ended March 31,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
|  | (in thousands)
Amortization of debt discount and issuance costs |  | $ | 1,129 |  |  | $ | — |  |  | $ | 1,682 |  |  | $ | — |
Contractual interest expense |  | 15,009 |  |  | — |  |  | 30,687 |  |  | — |
Total interest expense |  | $ | 16,138 |  |  | $ | — |  |  | $ | 32,369 |  |  | $ | — |
The amounts shown in the table below, related to the Credit Facility, represent the maximum payments the Company is obligated to make to the Lenders during the indicated periods. Principal repayment of up to $160.0 million is scheduled through the fifth year, in line with the contractual terms of the Credit Facility. Actual payments may vary and could be lower than the amounts presented in the table.
Year |  | Amounts
|  | (in thousands)
2025 (remainder) |  | $ | 50,000 |
2026 |  | 40,000 |
2027 |  | 40,000 |
2028 |  | 15,000 |
2029 |  | 15,000 |
Thereafter |  | 203,063 |
Total |  | $ | 363,063 |

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