Debt
In May 2022, as amended in October 2022, we entered into a term loan facility (the “Oxford Loan Agreement”) with Oxford Finance LLC (the "Lender") for up to $100.0 million. In connection with the Oxford Loan Agreement, we granted a security interest in substantially all of our current and future assets. At closing, we entered into a term loan for $10.0 million and we decided not to draw upon the additional $65.0 million that became available to us over the course of 2023 as certain conditions related to the development of bexotegrast and one of our preclinical product candidates were satisfied. As of December 31, 2023, the time period to draw upon the additional $65.0 million had lapsed.
On March 11, 2024, we entered into an Amended and Restated Loan and Security Agreement (the “Amended Loan Agreement”) with the Lender to borrow a series of term loans up to an aggregate principal amount of $150.0 million (the “Term Loans”), of which $50.0 million is subject to the Lender’s sole discretion.
Pursuant to the Amended Loan Agreement, we drew an initial Term Loan of $30.0 million, inclusive of $10.0 million in principal amount previously outstanding under the Oxford Loan Agreement. Under the agreement, additional borrowing of up to an additional $70.0 million of Term Loans would be available at our option, $35.0 million being available commencing October 1, 2025 contingent upon the continued operation of the BEACON-IPF study and a further $35.0 million being available upon demonstrating that BEACON-IPF had achieved positive Phase 2b data sufficient to support continued development, in the sole discretion of Oxford.
The principal amount outstanding under the Term Loans accrued interest at a floating per annum rate equal to (i) the greater of (a) 1-month term Chicago Mercantile Exchange (“CME”) Term Secured Overnight Financing Rate (“SOFR”) on the last business day of the month that immediately precedes the month in which the interest will accrue and (b) three and one-half percent (3.50%) plus (ii) five and one-quarter percent (5.25%).
On October 14, 2025, the Company made a full voluntary prepayment of $32.4 million and recorded a loss on extinguishment of debt of $1.8 million, representing the difference between the prepayment amount and the carrying value of debt including accrued interest as of the extinguishment date. Upon prepayment, the term loan, related security interests, and all other obligations, covenants, debts and liabilities under the Amended Loan Agreement were satisfied and discharged in full and the Amended Loan Agreement and all other documents entered into in connection with the Amended Loan Agreement were terminated.
The effective interest rate for the term loan through the prepayment date was 10.64% and 11.51% for the year ended December 31, 2025 and 2024, respectively. Interest expense during the years ended December 31, 2025 and 2024 was $2.5 million and $3.0 million, respectively.