Edesa Biotech Secures $10 Million Credit Facility with Company Founder
Revolving Line of Credit to Support Completion of Government-Funded ARDS StudyTORONTO, ON / ACCESSWIRE / October 12, 2023 / Edesa Biotech, Inc. (NASDAQ:EDSA) ("Edesa", or the "Company"), a clinical-stage biopharmaceutical company focused on …
- Revolving Line of Credit to Support Completion of Government-Funded ARDS Study
TORONTO, ON / ACCESSWIRE / October 12, 2023 / Edesa Biotech, Inc. (NASDAQ:EDSA) ("Edesa", or the "Company"), a clinical-stage biopharmaceutical company focused on inflammatory and immune-related diseases, today announced it has entered into a binding commitment letter in respect of a $10 million revolving credit facility agreement with Dr. Par Nijhawan, MD, the Company's Chief Executive Officer and Founder. The binding commitment letter was executed in parallel with a C$23 million commitment from the Government of Canada to support a pivotal Phase 3 clinical study of the Company's first-in-class therapeutic candidate.
Stephen Lemieux, Chief Financial Officer of the Company, said that the credit facility will be an important part of the Company's growth strategy, and in particular, its development and commercialization plans for EB05 (paridiprubart), a monoclonal antibody that Edesa is developing as a treatment for a severe form of respiratory failure known as Acute Respiratory Distress Syndrome (ARDS).
"We greatly appreciate this vote of confidence from our Founder, and the attractive terms of the agreement," said Mr. Lemieux. "With this financial milestone and the funding commitment from the Government of Canada, we will be in a significantly stronger position to move forward toward the completion of our pivotal Phase 3 study of EB05 and prepare for potential approval."
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The binding commitment letter with Dr. Nijhawan provides for a revolving line of credit in the amount of up to $10 million, with $3.5 million available immediately upon the execution of the definitive agreement for the credit facility. Advances under the revolving credit facility will be subject to compliance with all applicable laws, and tied to a borrowing base consisting of eligible grant reimbursement receivables, future potential license fee receivables and any other accounts receivable. The binding commitment letter provides for an interest rate of the CIBC US Base-Interest Rate plus 300 bps and a maturity date of March 31, 2026. The availability of the credit facility will be subject to finalization and execution of a definitive credit agreement and related documents.