Array BioPharma received an $80 million funding from Deerfield Management, one of its largest shareholders. Array ended the third quarter of fiscal 2008 with $116 million in cash, cash equivalents, and marketable securities.
Deerfield will receive a 2.5% transaction fee and was issued warrants with a six-year term to purchase six million shares of common stock at $7.54 per share. The price represents a 26.29% premium over its closing value yesterday.
The $80 million commitment is a six-year, interest-bearing loan under a facility agreement. The deal provides Array with two draws of $40 million each in June and December. The company will make quarterly interest payments at a rate of 2% per annum and pay interest accruing at 6.5% per annum, compounded quarterly, at maturity.
Array believes that together with existing reserves, the $80 million financing will enable it to advance six small molecule programs through clinical proof-of-concept studies while continuing discovery research.
Array has three inflammation and pain programs as well as four anticancer agents in development. There are two compounds, one in Phase I and one in Phase II, being evaluated in inflammatory pain and another candidate will enter a mid-stage study in rheumatoid arthritis. Array also has two Phase II compounds and two early-stage candidates in cancer trials.