Medicus Pharma (NASDAQ:MDCX) announced on Thursday that it has entered into a definitive financing agreement with an institutional investor for an up to $22 million structured, non-dilutive financing facility aimed at supporting its clinical development programs and extending its cash runway.
The biotech and life sciences company said the financing is expected to increase its pro forma cash position to about $30 million and provide projected operating liquidity for more than 24 months.
Under the agreement, Medicus will receive $12 million in immediate operating capital, while an additional $10 million will be held in a collateralized deposit account and released upon the achievement of specified milestones.
The financing package includes a $12.86 million secured promissory note with an 8.75% interest rate and a 6.5% original issue discount, as well as a separate $10 million secured promissory note carrying a 5% interest rate with no original issue discount.
The notes mature in 18 months and may be repaid early at the company’s option, subject to customary prepayment premiums. The obligations are secured by substantially all company assets and guaranteed by Medicus’ subsidiaries.
The company said it plans to use the proceeds to advance its clinical development programs, pursue potential strategic business development opportunities, and for general corporate and working capital purposes. Part of the proceeds will also be used to repay approximately $2.5 million in outstanding debt.
“We believe this financing structure provides Medicus with meaningful capital flexibility while preserving the company’s ability to support expanding strategic development initiatives,” Medicus CEO Dr Raza Bokhari said.
“This structure strengthens the company’s financial outlook with nearly $30 million cash on the balance sheet providing a projected operating runway of more than 24 months, while establishing a staged capital release mechanism aligned with execution.”
Shares of Medicus added 8.2% in New York on Thursday morning.