Listed on Nasdaq, Kura Oncology is engaged in developing small molecule drug candidates for the treatment of cancer
Kura Oncology secures $25m investment from Bristol Myers Squibb. (Credit: fernando zhiminaicela from Pixabay)
US-based biopharmaceutical company Kura Oncology has secured an equity investment of $25m from Bristol Myers Squibb and a term loan facility worth up to $125m from Hercules Capital.
The clinical-stage company expects its current operational plan to be funded through 2026 assuming that the term loan is fully tapped along with its existing cash. It is engaged in developing precision drugs for the treatment of cancer.
The biopharma company has agreed to sell Bristol Myers Squibb 1.37 million of its shares for a price of $18.25 per share.
Kura Oncology president and CEO Troy Wilson said: “Bristol Myers Squibb has deep expertise and history in advancing transformational cancer treatments.
“This equity investment strengthens the relationship between our organizations and enables Bristol Myers Squibb to provide valuable strategic input into our global development strategy.
“We are honoured and excited to have their support and look forward to their input as we work to deliver innovative science with the potential to benefit patients.”
According to the terms of the loan arrangement with Hercules Capital, Kura Oncology will be able to draw $10m right away after closing. The pharma company at its sole discretion will also be able to get instant access to an additional $15m.
Upon reaching certain clinical milestones in the near future, the company may be eligible to receive an additional $75m in two tranches. Subject to Hercules Capital’s approval, the company may draw a further $25m in a fourth tranche.
The loan has an initial interest rate of 8.65%, and it will change as the prime rate fluctuates in the future. Kura Oncology will pay interest for the first 24 months only, with the possibility of an extension to 48 months if certain milestones are achieved.
Hercules Capital managing director Lake McGuire said: “This capital commitment from Hercules aims to help Kura deliver new treatment options to patients suffering from AML and other cancers and reflects our dedication to provide customized financing solutions to growth-stage life science companies.”