Item 1.01 Entry into a Material Definitive Agreement.
On June 2, 2021 (the "Closing Date"), Otonomy, Inc. (the "Company") entered into
the Third Amendment to Loan and Security Agreement (the "Third Amendment"),
which amends its Loan and Security Agreement, dated as of December 31, 2018 (the
"Loan Agreement"), by and among the Company, Oxford Finance LLC, as collateral
agent, and the lenders party thereto from time to time.
Among other things, the Third Amendment amends and restates three existing
secured promissory notes issued by the Company pursuant to the Loan Agreement in
an aggregate principal amount of $15.0 million, such amount representing the
original term loan, which remains outstanding in its original principal amount
for an extended term with a new maturity date of May 1, 2026. The Third
Amendment also provides for an additional term loan in the principal amount of
$1.0 million (the "New Term Loan"), and for an extended interest-only period
until June 1, 2023 or, if the Company meets certain agreed milestones, until
June 1, 2024.
The Company has the right to prepay any Term Loan in whole or in part at any
time, subject to an accrued final payment fee and a prepayment fee of 3.00% if
prepaid on or prior to the first anniversary of the Closing Date, 2.00% if
prepaid after the first anniversary of the Closing Date and on or prior to the
second anniversary of the Closing Date, and 1.00% thereafter. Amounts prepaid or
repaid under a Term Loan may not be reborrowed. The New Term Loan was fully
funded on the Closing Date and all Term Loans mature on May 1, 2026 (the
"Maturity Date"). The Company paid customary closing fees.
The description of the Third Amendment contained herein is not complete and is
qualified in its entirety by reference to the text of the Third Amendment, a
copy of which will be filed with the Securities and Exchange Commission on a
later date.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 hereof is incorporated by reference into
this Item 2.03.
Item 8.01 Other Events.
On May 28, 2021, the Company entered into an asset purchase agreement with
ALK-Abelló, Inc. ("ALK") pursuant to which ALK acquired the Company's
intellectual property and other material assets with respect to the Company's
product known as OTIPRIO® (ciprofloxacin otic suspension). Under the agreement,
ALK is obligated to pay the Company an upfront payment and certain amounts based
on net sales of OTIPRIO for a specified period of time. Prior to the
acquisition, ALK had been co-promoting OTIPRIO with the Company in the United
States pursuant to an agreement the Company entered into with ALK in June 2020.
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OTONOMY