Zosano Pharma announced that it has secured $15.0 million in debt financing through Hercules Technology Growth Capital. Zosano amended its existing secured-term loan facility with Hercules to increase the total loan amount to $15.0 million, with an approximately $11.7 advance made to Zosano at closing of the loan amendment.

Zosano Pharma has used approximately $11.4 million of the proceeds from this financing to prepay all amounts owing to BioMed Ventures under a 2012 promissory note, and will make interest-only payments to Hercules on the $15.0 million principal balance of the term loan on a monthly basis for twelve months beginning July 1, 2015 (or for 18 months if Zosano satisfies certain financing conditions), with repayment of the principal balance amortized in equal monthly installments of principal and interest after the interest-only period and through the loan’s December 1, 2018 maturity date. Under the amended term loan facility, the floating interest rate has been reduced to a per annum rate equal to the greater of (x) 7.95 percent plus the “prime rate” as reported in The Wall Street Journal minus 5.25 percent and (y) 7.95 percent. In addition, Zosano Pharma issued Hercules a warrant to purchase 40,705 shares of its common stock at an exercise price of $7.37 per share.

“This debt financing allows Zosano to improve its overall cost of capital, to extend the original Hercules loan term by 18 months through the payoff of existing debt, and to better align the company’s cash runway with its strategic plans,” said Vikram Lamba, CEO of Zosano Pharma.

Zosano Pharma is a clinical-stage specialty pharmaceutical company that has developed a proprietary transdermal microneedle patch system to deliver therapeutics conveniently through the skin for the treatment of a variety of indications.