L.O.T.W. #127 - Dyne Therapeutics - taps credit market to augment recent equity capital raise
Dyne secures $275 million structured term loan from Hercules Capital
Dyne Therapeutics entered into a $275 million non-dilutive senior secured term loan facility with Hercules Capital, with $100 million funded upfront and the remaining $175 million tied to clinical, regulatory, and commercial milestones. The structured financing provides Dyne with flexibility as it advances late-stage programs for myotonic dystrophy type 1 (DYNE-101) and Duchenne muscular dystrophy (DYNE-251), including potential U.S. Accelerated Approval submissions in 2026.
👓At a Glance
Borrower: Dyne Therapeutics, Inc.
Lender: Hercules Capital and managed funds
Deal Size: $275.0 million
Structure: Senior secured, multi-tranche term loan
Rate: Variable - prime rate + 2.45% with a prime floor of 7.50%
Term: ~ 60 months
Use of Proceeds: Support continued research and development and commercialization expenses associated Dyne’s leading therapeutic candidates
Source: Press Release
📷Borrower Snapshot
Sector: Health Care
Subsector: Biotechnology
Ownership: Public
Commercial Stage: Pre-commercial revenue
Business Overview: Dyne Therapeutics is a clinical-stage biotech company developing targeted therapies for serious muscle diseases, including genetic muscle disorders such as myotonic dystrophy type 1 (DM1), Duchenne muscular dystrophy (DMD), and facioscapulohumeral muscular dystrophy (FSHD). The company’s proprietary FORCE™ platform delivers oligonucleotide therapeutics directly to muscle tissue using antibody-oligonucleotide conjugates, improving uptake and durability. Dyne's lead programs - DYNE-101 for DM1, DYNE-251 for DMD, and DYNE-301 for FSHD - are currently in clinical development with early data showing encouraging signs of target engagement and functional benefit.
⚙️Structure & Terms
Source: SEC 8-K
Commitment: $275.0 million
Tranche 1 commitment - $100.0 million funded at close
Tranches 2 - 4 total $115 million in aggregate and are contingent on negotiated milestones
Tranche 5 commitment - $60 million subject to approval from Hercules
Interest-only Period: 36 months with ability to extend to 60 months upon completion of certain clinical, regulatory, and commercial milestones
Maturity: July 1, 2030
Rate: Variable - prime rate + 2.45% with a prime floor of 7.50%
Due Diligence Fee: redacted
Initial Facility Charge: $1 million (1% of tranche 1 advance)
Final Payment Fee: 5.50%
Prepayment Fee: 2% if prepaid in year 1, 1.5% if prepaid in year 2, 0.75% if prepaid thereafter
Right to Invest: $5 million in a subsequent financing
Covenants:
Minimum cash
testing begins April 1, 2026 unless Dyne raises at least $350 million in equity proceeds between June 4, 2025 and December 15, 2026, then begins on January 1, 2027
initially set to 60% of principal balance and subject to step downs based on the achievement of clinical, regulatory, and commercial milestones (specific step down percentages are redacted)
will not be tested if market cap exceeds $1.65 billion
Minimum Revenue
testing begins ~ nine months after regulatory approval milestones are achieved
measured on trailing six month basis and based on percentage to plan (performance to plan)
compliance not required if:
cash exceeds outstanding balance of secured obligations, or
market cap exceeds $1.65 billion and cash is at least greater than or equal to 50% of the outstanding secured obligations