Navidea arranges debt financing from Hercules

Navidea Biopharmaceuticals (AMEX:NAVB), formerly Neoprobe Corp., has secured up to $10 million of debt financing from a fund managed by Hercules Technology Growth Capital (NASDAQ:HTGC). Neoprobe’s name change and new stock symbol are effective today.

“The successful arrangement of this financing bolsters our cash position with limited potential dilution as we close in on a number of important near-term milestones,” Navidea CFO Brent Larson said in a statement. “This funding further strengthens our already solid balance sheet and provides us with the flexibility to consider additional product acquisition and partnership opportunities.””

The first funding of $7 million closed on Dec. 29 and is in the form of a secured note, which is repayable in instalments over 30 months, following an interest-only period of between six-to-12 months. The note bears interest at a prime-based variable rate, currently 10%.

Up to $1.5 million of the principal of the note is convertible at the option of Navidea, and up to $1.5 million of principal is convertible at the option of Hercules, each at a conversion price of $2.77 a share.

In addition, Navidea issued Hercules 333,333 warrants to purchase shares of Navidea common stock at an exercise price of $2.10 a share. A second funding of $3 million is available on Navidea’s regulatory clearance to market its Lymphoseek lymphatic tissue targeting agent in the U.S.

Chad Norman, managing director of Hercules, a leading specialty finance company providing technology and life sciences companies with debt and equity growth capital, said Navidea has achieved many significant milestones in building a pipeline of precision radiopharmaceutical diagnostic candidates.

“We are confident that Navidea’s strong management team will be able to seize on the considerable market opportunity for these promising product candidates,” he added.