Ocera Therapeutics secured a $20 million debt facility from Oxford Finance and Silicon Valley Bank (SVB). Ocera intends to use the additional capital to support the ongoing development of the company's novel molecule OCR-002 to treat acute and chronic patients with hepatic encephalopathy.

"This facility provides additional financial strength and flexibility at an attractive cost of capital with the initial $10 million tranche extending our cash runway to mid-2017," said Michael Byrnes, chief financial officer of Ocera. "The second tranche of $10 million, if drawn, would extend our runway further, to the fourth quarter of 2017. Importantly, this debt financing should provide us with cash beyond some very meaningful milestones for both the IV and oral formulations of OCR-002. We are pleased to have the support of both Oxford and SVB and their confidence in Ocera and OCR-002."

"We believe Ocera has a unique and innovative approach to treating hepatic encephalopathy, an area of high unmet medical need, and we are encouraged by the recently completed interim analysis in Ocera's Phase 2b study evaluating OCR-002," said Christopher A. Herr, senior managing director for Oxford Finance. "Oxford welcomes the opportunity to provide capital to support the ongoing development of Ocera's research in this critical field."

"We are very pleased to continue to work with the Ocera team and believe in their approach of tackling some of the greatest unmet needs in liver disease," said Jennifer Friel Goldstein, Managing Director at Silicon Valley Bank. "OCR-002 has continued to show strong signals of impact and we look forward to assisting the Ocera team with the full range of SVB resources available."

Under the terms of the two-tranche loan agreement, Ocera received $10 million upon closing on July 30, 2015, with the remaining $10 million available for draw until December 31, 2016 at Ocera's discretion, subject to the achievement of certain financial and clinical milestones. The facility is in the form of a secured note, which is repayable in interest only installments over 18 months, with a 6 month extension upon the drawing of the second tranche. The note bears interest at a rate fixed at the funding date of each tranche. In addition, upon the funding of each tranche, Ocera will issue warrants to purchase shares of Ocera common stock equal to 4% of the funded amount.

Armentum Partners served as advisor to Ocera for this financing. Armentum has advised on more than 50 debt or royalty transactions since the beginning of 2014 representing roughly $1.2 billion in committed capital.

Ocera Therapeutics, Inc. is a clinical stage biopharmaceutical company focused on the development and commercialization of OCR-002 (ornithine phenylacetate) in both intravenous and oral formulations. OCR-002 is an ammonia scavenger and has been granted orphan drug designation and Fast Track status by the U.S. Food and Drug Administration (FDA) for the treatment of hyperammonemia and resultant hepatic encephalopathy in patients with acute liver failure and acute-on-chronic liver disease.