Motif Bio reaches deal to reduce repayment burden

Clinical-stage biopharmaceutical company Motif Bio announced on Monday that its wholly-owned subsidiary Motif BioSciences has entered into an amendment agreement with its lender Hercules Capital in relation to the loan agreement it initially announced on 15 November.

The AIM-traded firm said that, under the amendment, Motif BioSciences would make an immediate early repayment of $7m, and would then make a further repayment of $0.5m on the earlier of 90 days - 18 May - or receipt of funds from an equity raise of $2m or greater.

There would be a three-month interest-only period on the remaining loan, and Hercules had waived any applicable prepayment charges.

As a result, future interest and amortisation payments would be substantially lower than before.

“Though the company remains in compliance with the terms of its loan agreement, it has agreed to this amendment in order to avoid unilateral action by Hercules based upon any position that Hercules may take that the company is in default,” Motif Bio’s board explained in its statement.

Following the $7m repayment, Motif Bio would have cash of approximately $3m, and $7.7m of outstanding debt drawn from the Hercules loan facility.

Following the amendment, Motif Bio said it intended to manage the funds available to it “aggressively”, and would need to raise capital in the near term.

The company said that following receipt of a Complete Response Letter (CRL) from the US Food and Drug Administration (FDA), as it announced on 14 February, it had been consulting with its internal and external experts and was preparing the required information package to request a meeting with the FDA as soon as possible to discuss the CRL.

New Drug Application (NDA) (ABSSSI).

The CRL stated that the FDA could not approve the new drug application for iclaprim, for the treatment of acute bacterial skin and skin structure infections, in its present form.

It indicated that additional data was needed to further evaluate the risk for liver toxicity before the new drug application could be approved.

Once requested, the FDA typically grants a meeting within 45 days.

“However, there can be no guarantee as to the date of a meeting with the FDA and no certainty that the funds available to the company, without an additional capital raise, will enable it to reach this date,” Motif Bio explained.

“The company is currently assessing the options available to it to raise sufficient capital to provide cash runway to enable it to meet the FDA and discuss options to advance iclaprim towards approval.”

Motif Bio said it planned to hold a conference call this week to discuss recent events, and its plans, and would provide the details in due course.