Motif Bio plc, a clinical stage biopharmaceutical company specializing in developing novel antibiotics, announced that the company has entered into an agreement for up to $20 million in debt financing with Hercules Capital, Inc. a provider of debt financing for companies in life sciences and technology-related markets. The funds will be used to fund pre-commercialization activities and other corporate activities in preparation for the anticipated U.S. launch of iclaprim in 2019.
The first tranche of US$15 million will be drawn down immediately, with the remaining US$5 million available upon the achievement of certain milestones anticipated in 2018, or at the lender’s discretion. The terms are typical for facilities of this type and include an initial interest-only period of 15 months, extendable to 21 months on the achievement of certain milestones; a 30-month capital and interest repayment period thereafter; an interest rate of 10% tied to the US prime rate and customary security over all assets of the Company, except for intellectual property where there is a negative pledge. Under the agreement, the Company shall issue Hercules warrants to purchase up to 73,452 of its American Depository Shares (ADSs) (each representing 20 ordinary shares) at an exercise price of US$9.53 per ADS, representing 3.5% of the loan. Hercules also has the right, in its discretion, to participate in any subsequent financing, such as an equity offering, in an amount up to US$1 million.
The Company expects to submit a New Drug Application (NDA) for iclaprim for the treatment of acute bacterial skin and skin structure infections (ABSSSI) to the US Food and Drug Administration (FDA) by the end of the first quarter of 2018 and, if accepted, a decision on approval to market is anticipated in the fourth quarter of 2018. The Company is also progressing a Marketing Authorisation Application in parallel and expects to make a submission to the European Medicines Agency during the second quarter of 2018.
Robert Dickey, IV, Chief Financial Officer of Motif Bio commented, “The financing we have secured provides us additional flexibility as we pursue our corporate objectives, including submitting a NDA for iclaprim in the first quarter of 2018 and continuing our pre-commercialisation activities.”
Scott Bluestein, Chief Investment Officer at Hercules Capital commented, "Hercules is pleased to enter into this financing partnership with Motif Bio as the Company moves its differentiated antibiotic through NDA filing and, hopefully, to commercialisation. This investment provides another example of our ability to finance life sciences companies developing drugs for unmet needs."