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Silicon Valley Bank, Oxford Finance Provide $42MM Term Loan to Ignyta

July 01, 2016, 08:03 AM
Filed Under: Medical

Ignyta, Inc., a biotechnology company focused on precision medicine in oncology, announced it has secured a $42 million term loan facility from Silicon Valley Bank and Oxford Finance. Under the loan facility, the company received initial funding of $32 million, substantially all of which was used to repay the company's prior loan with Silicon Valley Bank, and has a conditional option to receive an additional $10 million.

"This loan facility strengthens our balance sheet, enabling us to aggressively pursue the development of our lead program, entrectinib, and continue the development of the rest of our precision medicine oncology pipeline," said Jacob Chacko, M.D., CFO of Ignyta. "We appreciate the support Silicon Valley Bank and Oxford Finance are providing to us as we continue to grow."

The loan agreement, in addition to customary conditions, provides that the second tranche of $10 million may be drawn down by Ignyta at any time from April 7, 2017 to August 31, 2017, provided that Ignyta has satisfied certain conditions to trigger the second tranche.

Borrowings under the credit facility will bear interest at a rate of Prime + 4.35%, and have interest only payments for twenty-four months, followed by an amortization period of thirty-six months. The interest only period will be extended by an additional six months in the event Ignyta has satisfied certain conditions to trigger the six-month extension. In the event that the interest only period is extended, then the amortization period will be reduced to thirty months. In connection with entering the credit facility, Ignyta also agreed to issue warrants to Silicon Valley Bank and Oxford Finance equal to 1.5% of the funded amount, with an exercise price equal to the lower of the ten-day average price of Ignyta’s common stock prior to funding or the price per share on the day prior to funding.

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