Shares of 4D Pharma (LON: DDDD) are rallying on Thursday after it announced the closing of a senior secured credit facility for up to $30m with Oxford Finance.
Oxford Finance is a specialty finance firm that provides senior debt to life sciences and healthcare services companies.
4D said the financing will provide them with up to $30 million of cash in three installments. An initial tranche of $12.5 million will be paid at closing, with the remaining $7.5 million and $10 million payments dependent on the achievement of certain milestones.
The facility will require 4D pharma to make monthly interest-only payments through to September 1, 2023, or, subject to the achievement of development milestones, September 1, 2024.
The company has additionally granted Oxford Finance a warrant, exercisable for five years from today, to subscribe for 212,568 new shares at $1.18 per share. There will be further warrants granted as further tranches are drawn down.
“The credit facility from Oxford Finance provides access to additional capital strengthening our financial position and increasing our financial flexibility as we continue to advance our programs to bring first-in-class Live Biotherapeutics to market,” said Duncan Peyton, CEO of 4D pharma.
“The initial $12.5 million tranche of this financing extends our cash runway into Q4 2022, with multiple clinical catalysts throughout 2021 and 2022.”
Following the announcement, 4D Pharma's share price is up 6.7% at 90.48p.
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