Essa Pharma (NASDAQ:EPIX; TSX:EPI) has secured a $10-million term loan facility from Silicon Valley Bank and initially will draw down $8 million, with a conditional option to receive an additional $2-million.
"This loan facility strengthens our balance sheet as we continue to enroll patients in the Phase 1 dose escalation clinical trial of EPI-506, our product candidate for castrate resistant prostate cancer, and prepare for the Phase 2 portion of the clinical trial," Dr. David Parkinson, president and CEO, said in a statement.
Coupled with existing cash resources, the proceeds from the term loans are expected to provide Essa with sufficient cash to complete EPI-506's Phase 1 clinical study, trigger a $5.4-million grant under the Cancer Prevention Research Institute of Texas program at completion of the Phase 1 program and commence EPI-506's Phase 2 portion of the trial.
The term loans bear an interest rate of Wall Street Journal Prime Rate plus 3.0% annually and will mature on Sept. 1, 2020. The term loans will be secured by perfected first priority lien on all the company's assets, with a negative pledge on intellectual property.