PolyMedix, a biotechnology company with a focus on the development of innovative therapeutic drugs that can be used in the treatment of serious acute-care conditions, recently completed a $12 million financing arrangement. This financing can help the company continue with a multinational Phase 2 clinical trial that is demonstrating the effectiveness of its PMX-30063 defensin-mimetic antibiotic. The drug is intended for use in the treatment of patients with Acute Bacterial Skin and Skin Structure Infections (ABSSSI) caused by Staphylococcus aureus, including methicillin-resistant Staph aureus (MRSA). PolyMedix has recently reported that it had completed enrollment of 215 patients in the study.
PolyMedix entered into a loan and security agreement with MidCap Financial LLC. Under the secured term loan, MidCap will provide PolyMedix with up to $12 million in new capital. The funds were used to pay-off PolyMedix's existing debt and to increase the company’s general working capital.
Edward Smith, Vice President Finance and Chief Financial Ofiicer of PolyMedix, was pleased with the deal and said, "We are very pleased with this new facility, which refinances at a lower cost of capital, improves our cash flow, and strengthens our balance sheet. All of these provide us with greater flexibility in advancing the development of our programs."
Initally, PolyMedix obtained $8 million upon the closing of the agreement. The remaining portion of the loan will be available to the company subject to the terms of the agreement. The loan facility requires interest-only payments for the first nine months and carries a fixed interest rate of 11.95 percent per year. About $5.7 million of the first installment was used to pay off PolyMedix's previous loans. The remaining $2.3 million will be used for general working capital purposes.
MidCap also received a five-year warrant to purchase 161,290 shares of PolyMedix common stock at an exercise price equal to $1.24 per share based on the initial advance. The warrant will allow MidCap to buy additional shares if PolyMedix uses the remaining $4 million available under the agreement.
PolyMedix's antibiotic compound, PMX-30063, is the first of a new class of antibiotics known as defensin-mimetics. PMX-30063 is a small molecule designed to mimic the activity of human host-defense proteins (HDPs), the body's natural defense against bacterial infections. HDPs kill bacteria by directly targeting bacterial membranes and disrupting them. Widespread resistance to this mechanism has not developed despite millions of years of evolution. With PMX-30063 designed to mimic HDPs, the company believes that resistance is also unlikely to evolve to this innovative antibiotic, making PMX-30063 a novel potential solution to the growing problem of bacterial resistance. PMX-30063 has been successfully tested in three Phase 1 clinical studies and has now completed enrollment in a Phase 2 clinical trial to treat patients with Acute Bacterial Skin and Skin Structure Infections caused by Staph aureus bacteria.