Midatech Pharma PLC (LON:MTPH) shares soared higher on Friday as the firm said the Spanish government had conditionally approved a €6.6mln Reindustrialisation, or Reindus loan that will be used to help commercialise its flagship drug.
In all, the group has received around €8.5mln of public backing towards the estimated €16mln costs to build a plant in Bilbao to manufacture its MTD201 Q-Octreotide development product.
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MTD201 is a treatment for a hormonal disorder called acromegaly and neuroendocrine tumours such as carcinoid cancer. It is based on the company's polymer microsphere technology, Q-Sphera, which provides a sustained release method of delivery.
Chief executive Craig Cook said the Reindus loan would provide “a real boost” to the commercial manufacturing scale-up scheduled over the next 18-24 months in Bilbao.
“For our lead programme MTD201, completion of the commercial manufacturing is required prior to submitting for marketing authorisation in the US and EU, and the Reindus loan allows us to plan and move ahead with more confidence,” he added.
The loan, which will be provided at a coupon of 1.6%, requires Midatech to provide a €2.6mln guarantee. Repayments begin three years after drawdown over a 10-year term.
In late morning trading, Midatech shares were up 25% to 7p.
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