MedinCell secured an additional €20 million ($19.8 million) in financing from European Investment Bank (EIB).
The bullet credit facility agreement will take over from a previous €20 million ($19.8 million) loan granted in 2018 by EIB, which terms have been modified in June 2022 to pave the way for the new agreement by including Teva Pharmaceuticals’ revenues in the calculation of the variable remuneration and the absence of penalties for possible early repayments.
“We have a strong relationship with the European Investment Bank which has been a strategic partner of MedinCell for many years,” Jaime Arango, CFO of MedinCell, said. “Conditions to draw the two first parts of the new credit facility are already met and those to draw the last part of €10 million ($9.9 million) should be filled in the coming months. Therefore, the renewed support allows us to extend our cash visibility until at least the first quarter of 2024, while limiting the potential dilution for existing shareholders in the short term. At that point, the company should have reached a new level of maturity with regular revenue coming from a first product on market, with at least two investigational products in clinical Phase 3 and others in Phase 1 or 2, and with other programs at formulation or preclinical stage developed on our own or with partners.”
The credit facility is divided into a first tranche of €20 million ($19.8 million) (tranche A) and two tranches of €10 million ($9.9 million) (tranches B and C). The disbursement of each tranche is subject to the completion of certain conditions precedent specified in the credit facility agreement.
The maturity date is five years after disbursement for each tranche, which means that first reimbursement should occur in Q4 2027. The remuneration is tailored for each tranche separately, with cash interest paid annually, capitalized interest paid at maturity, and the potential capital gain under warrants based on success of the future increase in the company’s share price.
