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Borrowing | 3 Months Ended
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Mar. 31, 2026
Subordinated Borrowings [Abstract] |
Borrowing | 5. Borrowing In 2020, AnHeart entered into loan agreements with Bank of Hangzhou to obtain short-term borrowings to supplement its working capital. As of March 31, 2026, the outstanding balance net of repayments was $5.8 million. For the three months ended March 31, 2026, there were no borrowings or repayments. The fixed interest rate of these borrowings is 3.5% per annum. Loan Agreement On March 3, 2025 (the “Loan Closing Date”), the Company entered into a $100.0 million senior secured loan agreement (the “Loan Agreement”), with Sagard Holdings Manager LP (“Sagard”) as administrative agent, and the lenders party thereto. The $50.0 million tranche of the term loan was funded on June 25, 2025, following the U.S. Food and Drug Administration’s (“FDA”) approval of IBTROZI. The second tranche of $50.0 million of the term loan will be available at our option until June 30, 2026, because we have achieved first U.S. commercial sale of IBTROZI. The senior secured loans under the Loan Agreement (the “Loans”) mature on September 30, 2030 and bear interest at a variable annual rate equal to the secured overnight financing rate (subject to a 4.00% floor) plus a margin of 6.00%, payable quarterly. The Company will be required to pay a funding fee equal to a low single-digit percentage of each tranche, upon, and subject to, funding of such tranche, and an exit fee equal to a nominal percentage of each tranche upon repayment of such tranche. The Company may voluntarily prepay the Loans at any time subject to a prepayment premium which, until the second anniversary of the initial funding date, is equal to the amount of interest that would have been paid up to, but not including, the second anniversary of such date, plus 3.00% of the principal amount of the Loans being repaid. Thereafter, the prepayment premium equals 3.00% of the principal amount of the Loans being repaid and is reduced over time until the fourth anniversary date, after which no prepayment premium is required. The Company is required to make mandatory prepayments of the Loans with net cash proceeds from certain asset sales or insurance proceeds or condemnation awards, in each case, subject to certain exceptions and reinvestment rights. The obligations of the Company under the Loan Agreement are guaranteed by certain of its existing subsidiaries and are required to be guaranteed by subsequently acquired or organized subsidiaries, subject to certain exceptions (collectively, the “Guarantors”). The obligations of the Company under the Loan Agreement and the related guarantees thereunder are secured, subject to customary permitted liens and other agreed upon exceptions, by (i) a pledge of all of the equity interests of the Company’s and the Guarantors’ direct subsidiaries, and (ii) a perfected security interest in substantially all of the Company’s and the Guarantors’ tangible and intangible assets. The Loan Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, and dividends and other distributions, subject to certain exceptions. In addition, the Loan Agreement contains a financial covenant requiring that the Company maintain not less than $25 million of cash and certain cash equivalent investments. Failure of the Company to comply with the financial covenant will result in an event of default, subject to certain cure rights of the Company other than under certain specified circumstances. The Loan Agreement contains events of default which are customary for financings of this type, in certain circumstances subject to customary cure periods. Following an event of default and any cure period, if applicable, Sagard will have the right upon notice to terminate any undrawn commitments and may accelerate all amounts outstanding under the Loan Agreement, in addition to other remedies available to it as a secured creditor of the Company. The following table presents future minimum payments, including interest and the end of term charge, under the Loan Agreement as of March 31, 2026:
|  | March 31, 2026 |
|  | (In thousands) |
2026 (remaining 9 months) |  | $ | 3,819 |
2027 |  |  | 5,069 |
2028 |  |  | 5,083 |
2029 |  |  | 5,069 |
2030 |  |  | 54,042 |
Total |  |  | 73,082 |
Less: imputed interest |  |  | (22,832 | )
Less: unamortized debt discount and issuance costs |  |  | (2,923 | )
Total loan agreement |  | $ | 47,327 |
Revenue Interest Financing Agreement On the Loan Closing Date, the Company also entered into a Revenue Interest Financing Agreement (the “Financing Agreement”) with Sagard Healthcare Partners (Delaware) II LP (the “Investor”), pursuant to which the Investor paid the Company $150 million (the “Investment Amount”) on June 25, 2025, following the FDA’s approval of IBTROZI. In exchange for the Investment Amount, the Company has agreed to make tiered royalty payments to the Investor (the “Payments”) on U.S. net sales of IBTROZI equal to 5.5% of annual U.S. net sales up to $600 million and 3.0% of annual U.S. net sales between $600 million and $1 billion. The Company will retain all annual U.S. net sales above $1 billion. The obligation to make the Payments will cease upon the earliest occurrence of total Payments reaching 1.6 times of the Investment Amount by the calendar quarter ending on June 30, 2031, 1.75 times of the Investment Amount by the calendar quarter ending on June 30, 2034, or 2.0 times of the Investment Amount thereafter. The Company is required to make a true up payment to the Investor to the extent the Investor has not received Payments equaling at least 100% of the Investment Amount by February 1, 2043 in an amount equal to any such shortfall. The Company’s obligations under the Financing Agreement are secured, subject to customary permitted liens and other agreed upon exceptions and subject to an intercreditor agreement with Sagard, by a perfected security interest in (i) accounts receivable arising from U.S. net sales of IBTROZI and (ii) intellectual property, product registrations and regulatory approvals related to commercialization of IBTROZI in the United States. The Company has the right, but not the obligation (the “Call Option”), to buy out the Investor’s interest in the Payments at a repurchase price (the “Put/Call Price”) equal to (a) on or prior to the second anniversary of the Loan Closing Date, an amount equal to 140% of the Investment Amount, less all Payments made to the applicable repurchase date, (b) after the second anniversary but on or prior to August 1, 2031, an amount equal to 160% of the Investment Amount, less all Payments made to the applicable repurchase date, (c) after August 1, 2031 but on or prior to August 1, 2034, an amount equal to 175% of the Investment Amount, less all Payments made to the applicable repurchase date, and (d) after August 1, 2034, an amount equal to 200% of the Investment Amount, less all Payments made to the applicable repurchase date. The Financing Agreement contains customary representations and warranties and certain restrictions on the Company’s ability to incur indebtedness and grant liens on intellectual property, product registrations and regulatory approvals related to commercialization and development of taletrectinib in the United States. In addition, the Financing Agreement provides that if certain events (“Put Option Events”) occur, including certain bankruptcy events, non-payment of Payments, a change of control, expiration or termination of certain intellectual property rights or marketing authorization, an out-license or sale of all of the rights in and to taletrectinib in the United States and (subject to applicable cure periods) non-compliance with the covenants in the Financing Agreement, the Investor may require the Company to repurchase its interests in the Payments at the Put/Call Price. The Financing Agreement was recorded as debt at the time the funding occurred and is accounted for at amortized cost using the effective interest method. The Company uses the prospective method to account for changes in the effective interest rate arising from changes in the estimates of the revenue stream from the royalties. The following table shows the activity within the liability related to the Financing Agreement for the three months ended March 31, 2026:
|  | Liabilities Related to Financing Agreement |
|  | (in thousands) |
Carrying value of liability related to Financing Agreement at December 31, 2025 |  | $ | 155,404 |
Payments on Financing Agreement |  |  | (864 | )
Non-cash interest expense |  |  | 5,079 |
Amortization of issuance costs |  |  | 211 |
Carrying value of liability related to Financing Agreement at March 31, 2026 |  | $ | 159,830 |

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- Definition The entire disclosure for borrowings under subordinated debt agreements that qualify as available in computing net capital under SEC's uniform net capital rule, including restrictive covenants, collateral, interest rates and due dates, amounts due by date and amount owed in total. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 942 -SubTopic 470 -Name Accounting Standards Codification -Section 45 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147478878/942-470-45-1 + Details
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