NEW YORK (GenomeWeb News) – Response Biomedical today announced that it has entered into a C$2 million (US$1.9 million) debt financing agreement with Orbimed Advisors.
The Vancouver, British Columbia-based firm has structured the debt agreement so it can borrow money in tranches. Upon execution of the pact, it will draw down C$275,000 from Orbimed. It also has an option to draw down up to three further tranches of C$575,000, for a maximum potential draw of C$2 million.
Funds drawn under the agreement will bear interest at 4.5 percent annually, and Response Bio is obligated to pay Orbimed a commitment fee of C$80,000 upon maturity of the loan. In addition, Orbimed gained the right to participate in subsequent financings by Response Bio for up to two years so it may maintain its relative ownership stake in the molecular diagnostics firm.
Orbimed also has the right to appoint an additional director to Response Bio's board. As a result, Richard Bastiani has tendered his resignation from Response Bio's board to make way for the new, yet to be named director.
Response Bio, which makes the RAMP diagnostics platform, plans to use the funds for working capital and general corporate purposes.
Earlier this year it had filed for US Food and Drug Administration 510(k) clearance of its NTproBNP assay on its RAMP 200 system for the diagnosis of heart failure, but FDA declined to clear the product. That FDA decision led Roche to terminate a sales and distribution deal with Response Bio.
The firm recently restated a number of quarterly financial results after an internal review and consultation with external auditors. Those restatements followed the abrupt resignation in August of CEO Wayne Kay.