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Furiex Restructures Credit Facility With MidCap, Silicon Valley Bank

October 01, 2013, 07:29 AM
Filed Under: Pharmaceuticals

Furiex Pharmaceuticals, Inc. has executed a $15 million debt financing transaction with Fred Eshelman, Pharm.D., chairman and a 27.5% shareholder of Furiex. In parallel, Furiex has also entered into a Second Amended and Restated Loan and Security Agreement with MidCap Financial, LLC and Silicon Valley Bank to restructure its existing $40 million credit facility (MidCap/SVB Loan). The restructured agreement defers payment of principal until May 15, 2014 with a flexible amortization schedule linked to Furiex’s receipt of alogliptin royalties.

Under the terms of Dr. Eshelman’s loan agreement, his debt will be subordinated to the MidCap/SVB loan and will accrue interest at a rate of 9% per annum until maturity. The loan has an interest-only period of 12 months and thereafter will amortize principal payments of $166,700 per month plus accrued interest until the final balloon payment to be made at maturity, which will occur 91 days following repayment of the indebtedness under the MidCap loan agreement subject, however, to an outside maturity date of January 1, 2019.

The MidCap/SVB loan accrues interest at a rate of 10% per annum with interest only to be paid monthly until May 15, 2014 at which time quarterly principal payments become due. The principal payments are set as a percentage of the alogliptin royalties received by Furiex, subject to minimum and maximum amounts. The outside maturity date for repayment of the loan is October 1, 2018.

Proceeds from both debt facilities will be used to fund Furiex’s eluxadoline program for diarrhea-predominant irritable bowel syndrome, or IBS-d, that is currently in Phase III development, and for general working capital purposes.

Furiex Pharmaceuticals is a drug development collaboration company that uses innovative clinical development design to accelerate and increase value of drug development programs by advancing them through the drug discovery and development process in a cost-efficient manner. 

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