Faron Pharmaceuticals Limited (AIM:FARN) has raised €15 million through a convertible bond deal with US investor Heights Capital Management, giving the Finnish biotech more financial breathing room as it heads toward key clinical trial results.
The shares-based debt can later be converted into equity, with the option to expand the investment up to €35mn.
The fresh capital will be used to pay off a €9.1million secured loan from IPF, which had tied up Faron’s assets with strict covenants.
Clearing this debt unlocks cash and frees patents previously pledged as collateral.
The bond structure allows Faron to repay in shares or cash over three years.
If repaid in stock, the conversion price starts at €2.94 per share, a 20% premium to recent trading levels.
Faron says this funding strengthens its balance sheet ahead of April’s Phase II results for BEXMAB, its lead cancer immunotherapy programme. Further tranches are contingent on clinical success and share performance.