By Business Wire, October 01, 2013, 07:00:00 AM EDT
MORRISVILLE, N.C.--(BUSINESS WIRE)--
Furiex Pharmaceuticals, Inc. (NASDAQ:FURX) announced today it 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
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.
"The loan commitment from Dr. Eshelman and the revised agreement with
our lender provides us the financial resources needed to fund our
eluxadoline program," said Marshall Woodworth, chief financial officer,
treasurer and assistant secretary of Furiex. "Based on our current
forecast of expected receipt of various milestone and royalty payments,
we expect to have sufficient cash to fund the business through to the
top-line data readout of the Phase III studies."
"The team is energized with the vote of confidence from our chairman and
largest shareholder," added June Almenoff, M.D., Ph.D., president and
chief medical officer, "Financing is out of the way, and we look forward
to completing our pivotal studies on eluxadoline, a key value driver for
Eluxadoline is a first-in-class, locally-acting mu opioid receptor
agonist and delta opioid receptor antagonist in Phase III development
for treatment of IBS-d. In vivo studies indicate that the
activity of eluxadoline at the two different opioid receptors works to
modulate GI motility and decrease intestinal pain, without the
constipating effects of unopposed mu agonist activity. Furiex
successfully completed a Phase II study in 807 patients with IBS-d,
results of which are published in Gastroenterology 2013; 145:329-338.
Eluxadoline is locally active in the gut with very limited systemic
bioavailability, thus potentially decreasing central nervous system
effects and other systemic side effects associated with therapies
currently used to manage IBS-d.
Diarrhea-predominant irritable bowel syndrome is a functional bowel
disorder characterized by chronic abdominal pain and frequent diarrhea,
which affects approximately 12 million Americans. Although the exact
cause of IBS-d is not known, symptoms are thought to result from a
disturbance in the way the gut and nervous system interact. IBS-d can be
extremely debilitating and there are limited therapeutic options for
managing the chronic symptoms. IBS-d is associated with economic burden
in direct medical costs and indirect social costs such as absenteeism
and lost productivity, along with decreased quality of life.
About Furiex Pharmaceuticals
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. Our drug
development programs are designed and driven by a core team with
extensive drug development experience. The company collaborates with
pharmaceutical and biotechnology companies and has a diversified product
portfolio and pipeline with multiple therapeutic candidates, including
one Phase III-ready asset, two compounds in Phase III development, one
of which is with a partner, and four products on the market. The
company's mission is to develop innovative medicines faster and at a
lower cost, thereby improving profitability and accelerating time to
market while providing life-improving therapies for patients. For more
information, visit www.furiex.com.
About MidCap Financial LLC
MidCap Financial is a commercial finance company focused on middle
market lending in healthcare and other specialty vertical markets.
MidCap specializes in middle market loans in the $10 million to $200
million range. Its principal officers are all veterans of the healthcare
finance industry, having worked together at three healthcare finance
companies previously. The company is headquartered in Bethesda, MD, with
offices in Chicago and Los Angeles. www.midcapfinancial.com.
About Silicon Valley Bank
Silicon Valley Bank (www.svb.com)
is the premier bank for technology, life science, cleantech, venture
capital, private equity and premium wine businesses. SVB provides
industry knowledge and connections, financing, treasury management,
corporate investment and international banking services to its clients
worldwide through 27 U.S. offices and six international operations.
Silicon Valley Bank is the California bank subsidiary and the commercial
banking operation of SVB Financial Group. Banking services are provided
by Silicon Valley Bank, a member of the FDIC and the Federal Reserve
System. SVB Financial Group is also a member of the Federal Reserve
Except for historical information, all of the statements,
expectations and assumptions contained in this news release are
forward-looking statements that involve a number of risks and
uncertainties. Although Furiex attempts to be accurate in making these
forward-looking statements, it is possible that future circumstances
might differ from the assumptions on which such statements are based. In
addition, other important factors which could cause actual results to
differ materially include the following: continuing losses and our
potential need for additional financing; the risk that eluxadoline will
fail in Phase III clinical trials; our reliance on our collaborators and
the risk that revenues from royalties and milestone payments differ from
expectations; our need to find a collaborator for our late-stage
compounds or incur the expense and risk of commercializing them
ourselves; changes in the safety and efficacy profile of our existing
compounds as they progress through research and development; potential
changes to regulatory guidance by regulatory agencies such as the U.S.
Food and Drug Administration and the European Medicines Agency; the
terms of new collaborative agreements that we might enter into in the
future; the costs of defending any patent opposition or litigation
necessary to protect our proprietary technologies; and the other risk
factors set forth from time to time in the SEC filings for Furiex,
copies of which can be found on our website.
Source: Furiex Pharmaceuticals, Inc.