Proactive Investors - Run By Investors For Investors

Motif Bio to manage cash aggressively after making loan repayment

Lender Hercules Capital will receive an immediate US$7mln
Motif Bio to manage cash aggressively after making loan repayment
The company is looking to raise funds quickly as gears up for a meeting with the US Food & Drug Administration

Motif Bio Plc (LON:MTFB, NASDAQ:MTFB) said it will manage its cash aggressively after announcing plans to immediately repay a US$7mln tranche of a loan it has taken out.

It also signalled it will have to quickly raise funds after being left with US$3mln in cash following the payment to Hercules Capital. It still owes US$7.7mln to Hercules.

Motif will have to make a further US$500,000 repayment in 90 days, or by May 18, depending on whether it is able to raise at least US$2mln.

In a statement released Monday, the company said there will be a three-month interest-only period on the remaining loan, and that Hercules has waived any prepayment charges. 

As a result, future interest and amortisation payments will be substantially lower than before, it added.

“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 added.

The loan repayment follows the decision by the US Food & Drug Administration not to grant regulatory clearance to the company’s next-generation antibiotic, iclaprim.

Motif is seeking talks with the FDA, which has said additional data would be required “to further evaluate the risk for liver toxicity” before granting approval.

It is currently consulting with internal and external experts to prepare the information required by the drug regulator.

Once requested, it normally takes between a month and six weeks before a meeting with FDA officials takes place.

“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 warned.

“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.”

View full MTFB profile View Profile

Motif Bio PLC Timeline

May 07 2019

Related Articles

dna strand
May 08 2019
The latest update reveals the company significant clinical and commercial milestones in sight
Medical scanner
February 08 2019
The company’s digital platform and Artificial Intelligence (AI) software manages and helps interpret images from MRI (magnetic resonance imaging) and PRT (positron emission tomography) scanners
genedrive device
Here we take a closer look at Genedrive PLC (LON:GDR)

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use