Spring Bank Pharmaceuticals entered into a $20 million convertible debt financing agreement with Pontifax Medison Finance, a healthcare-dedicated venture debt fund.

“The addition of $20 million of new capital will extend Spring Bank’s operating cash runway beyond the end of 2021,” said Jonathan Freve, Spring Bank’s CFO. “During this operating period, we anticipate multiple clinical data readouts for our inarigivir hepatitis B virus (HBV) Phase 2b program and our intravenously-administered STimulator of INterferon Gene (STING) agonist, SB 11285, Phase 1a/1b clinical trial, which we expect to launch shortly”

Under the agreement with Pontifax, the loan will mature over 48 months and there are no required payments of principal for 24 months. Pontifax may elect to convert the outstanding loan based on a conversion price of $8.76 per share, which is equal to 2.0 times the 30-day volume weighted average price of Spring Bank’s common stock as of the trading day immediately prior to the entry into the loan agreement.

In connection with the loan agreement, Spring Bank has agreed to issue to Pontifax warrants to purchase up to an aggregate of 250,000 shares of its common stock at an exercise price of $6.57 per share, which is equal to 1.5 times the 30-day volume weighted average price as of the common stock on the trading day immediately prior to the entry into the loan agreement.

Cantor Fitzgerald acted as financial advisor and arranger to Spring Bank on this transaction.

Spring Bank Pharmaceuticals is a clinical-stage biopharmaceutical company engaged in the discovery and development of a novel class of therapeutics using its proprietary small molecule nucleotide platform.