Fred Eshelman, the founder of PPD which spun out Furiex Pharmaceuticals and in which he is the largest shareholder, is now bankrolling the firm with a cash infusion of $15 million.
He will earn 9 percent interest on the loan.
Furiex also says it has restructured an existing $40 million credit facility.
Furiex (Nasdaq: FURX) disclosed the new financing Tuesday and says the transactions were made to fund further development of a treatment for irritable bowel syndrome as well as for “general working capital.”
The company is due to receive some $10 million in payments from its partner Takeda Pharmaceutical Company after a diabetes drug received approval in Europe.
Eshelman is chairman of the Furiex board and also owns 27.5 percent of the firm’s stock. The philanthropist, who has given millions to UNC-Chapel Hill, founded Wilmington-based PPD. That firm is now privately held. It spun out Furiex in 2010 before going private.
Furiex lost $27.5 million in its most recent quarter. Its shares closed at $43.99 on Monday. Over the past year, Furiex has traded at a high of $49.50 and a low of $17.50.
According to Furiex, Eshelman loaned the company $15 million at an interest rate of 9 percent. It is an interest-only payment loan for 12 months.
Furiex also amended its $40 million credit facility with MidCapFinancial and Silicon Valley Bank.
“The loan commitment from Dr. Eshelman and the revised agreement with our lender provides us the financial resources needed to fund our eluxadoline program,” said Marshall Woodworth, chief financial officer of Furiex. “Based on our current forecast of expected receipt of various milestone and royalty payments, we expect to have sufficient cash to fund the business through to the top-line data readout of the Phase III studies.”
