Framingham-based GTC Biotherapeutics will secure $15 million in convertible debt with liens on its intellectual property and all its other assets in order to raise $10 million.
The company’s shareholders approved issuing $15 million in convertible bonds to Paris-based LFB Biotechnologies. The bonds will mature in 2012, will bear an annual interest rate of 8 percent and can be converted to GTC common stock at $0.31 per share at LFB’s discretion.
GTC and LFB have been partners in the development of certain plasma proteins since 2006.
Under the agreement, GTC is required to put $4 million of the proceeds in a cash account to secure its existing debt to GE Capital. LFB also has the right to require GTC to redeem stock warrants that are part of the financing agreement for $1.5 million if the debt is repaid in full.
GTC said it would use the approximately $10 million raised in the arrangement for “corporate purposes across all programs.”
GTC is developing a protein-based treatment for the prevention of blood clots in surgery patients. The protein used in the treatment is produced in the milk of genetically modified goats.
