Edesa Biotech Secures $10 Million Credit Facility
Edesa Biotech Secures $10 Million Credit Facility from CEO Dr. Par Nijhawan and $23 Million Commitment from the Government of Canada for Phase 3 Clinical Study
Edesa Biotech, Inc., a clinical-stage biopharmaceutical company focused on inflammatory and immune-related diseases, announced that 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."
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.
"I'm pleased to provide both financial support and leadership to the company as it builds on its recent operational and clinical successes," said Dr. Nijhawan. "Edesa has a strong development pipeline and I'm confident that we can continue to successfully execute on our plans to commercialize innovative drug therapies for large, underserved patient populations."
Additional details on the revolving credit facility will be outlined in the Company's Current Report on Form 8-K, which the Company expects to file with the U.S. Securities and Exchange Commission and on the SEDAR+ system in Canada.
The entering into of the binding commitment letter with respect to the credit facility constitutes a "related party transaction" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Securityholders in Special Transactions. The Company will file a material change report less than 21 days before the credit facility will be entered into, which shorter period is necessary in the circumstances in order for the Company to access working capital in the short term to continue its development and commercialization plans.
Published on : 13th October, 2023