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Framingham's GTC Biotherapeutics Inc. has struck an agreement to get $12.3 million from an existing shareholder, LFB Biotechnologies of France.
The agreement also has an option that could provide GTC with another $6.4 million from the shareholder company, LFB Biotechnologies, a wholly owned subsidiary of Laboratoire français du Fractionnement et des Biotechnologies S.A.
"GTC has entered into this financing arrangement with LFB following a careful and extensive assessment of the alternative opportunities available to us in the capital markets," said Geoffrey F. Cox, GTC's CEO and chairman, in a press release. "In today's challenging capital markets a continuing committed strategic investor such as LFB is highly valuable to the future of GTC."
The financing consists of bridge debt and is subject to GTC shareholder approval. GTC should receive $4 million under a $4.5 million secured convertible bridge note delivered upon signing. There will be an additional $8.3 million in cash due when GTC shareholders approve and issue convertible preferred stock in exchange for the money. The bridge debt will automatically convert into convertible preferred stock upon shareholder approval.
As part of these agreements, LFB is also providing $3.5 million of term debt for GTC to pay off the remaining net principal amount of its GE Capital loan.
LFB will hold first liens on all assets, including intellectual property, to secure this debt and its existing debt from GTC.
In total, if LFB Biotechnologies fully exercises its options, its new financial commitments to GTC will be up to $22.1 million including the new loans, convertible preferred stock and options to purchase additional preferred stock.
GTC Biotherapeutics develops, supplies and commercializes therapeutic proteins produced through transgenic animal technology. ATryn, GTC's recombinant human antithrombin, has been approved for use in the United States and Europe.
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