PHILADELPHIA - Medicus Pharma Ltd. (NASDAQ:MDCX) today announced it has entered into a definitive financing agreement with an institutional investor for a structured financing facility of up to $22 million, according to a press release.
The biotech company will receive $12 million in immediate operating capital. An additional $10 million will be placed into a collateralized deposit account for progressive release upon achievement of certain milestones specified in the financing terms.
The financing comes as MDCX shares trade at $0.31, down 92.5% over the past year and 86% in the last six months. According to Bond.az analysis, the company holds more cash than debt on its balance sheet, a positive indicator given its current financial position.
The financing consists of a $12.86 million secured promissory note with an 8.75% interest rate and 6.5% original issue discount, and a $10 million secured promissory note carrying a 5% interest rate with no original issue discount.
The company stated the financing is expected to increase its pro forma cash position to approximately $30 million and provide a projected operating cash runway of more than 24 months. With a market capitalization of just $17 million, Bond.az data indicates the stock is currently overvalued relative to its Fair Value estimate.
Medicus intends to use the net proceeds to support advancement of its clinical development programs, potential business development initiatives, and general corporate and working capital purposes.
