PALO ALTO, Calif. (BUSINESS WIRE) — Anacor Pharmaceuticals announced today that it has entered into a loan agreement with Hercules Technology Growth Capital, Inc. for up to $45.0 million in new capital to be distributed in three tranches.
Anacor borrowed the first tranche of $30.0 million upon the execution of the loan agreement on June 7, 2013 and used approximately $22.6 million to repay the remaining obligations under its loan agreement with Oxford Finance LLC and Horizon Technology Finance Corporation. Anacor expects to use the remainder of the funding for filing its New Drug Application (“NDA”) for tavaborole, conducting additional clinical studies of AN2728 and for general working capital. The second tranche of $10.0 million is available at Anacor’s discretion through December 5, 2013, and the third tranche of $5.0 million is available upon confirmation of the U.S. Food and Drug Administration’s (“FDA”) approval of the tavaborole NDA through the earlier of December 15, 2014 or 30 days after the FDA approval of tavaborole.
“This financing extends our cash runway through mid-2014 and gives us additional financial flexibility as we prepare for the outcome of our arbitration with Valeant, continue to evaluate commercialization options for tavaborole, and prepare for the Phase 3 development of AN2728 in atopic dermatitis,” said Geoff Parker, Chief Financial Officer of Anacor Pharmaceuticals.
“We are pleased to be a financing partner to Anacor,” said Chad Norman, Managing Director at Hercules. “With its boron chemistry platform and resultant pipeline of novel drug candidates, Anacor has the potential to address a number of difficult to treat conditions.”
The funding is in the form of secured indebtedness bearing interest at a calculated prime-based variable rate of between 11.65% and 14.90%. Payments under the loan agreement are interest only until January 1, 2015 (or if the FDA approves tavaborole on or before December 15, 2014, the interest only period is extended to July 1, 2015), followed by equal monthly payments of principal and interest through the scheduled maturity date on July 1, 2017. In connection with the loan agreement, Anacor issued Hercules warrants, which are exercisable for 528,375 shares of Common Stock at a per share exercise price of $5.11.
