UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
Date of Report: June 26, 2014
(Date of earliest event reported)
DURECT CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 000-31615 | 94-3297098 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
10260 Bubb Road
Cupertino, CA 95014
(Address of principal executive offices) (Zip code)
(408) 777-1417
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement.
On June 26, 2014, DURECT Corporation entered into a Loan and Security Agreement (the “Loan Agreement”) with Oxford Finance LLC, pursuant to which Oxford provided a $20 million secured single-draw term loan to the Company with a maturity date of July 1, 2018. The term loan was fully drawn at close and the proceeds are to be used for working capital and general business requirements. The term loan is secured by substantially all of the assets of the Company, except that the collateral does not include any equity interests in the Company, any intellectual property (including all licensing, collaboration and similar agreements relating thereto), and certain other excluded assets. The term loan repayment schedule provides for interest only payments for the first 18 months, followed by consecutive equal monthly payments of principal and interest in arrears starting on February 1, 2016 and continuing through the maturity date. The Loan Agreement provides for a 7.95% interest rate on the term loan, a $150,000 facility fee that was paid at closing and a final payment equal to 8% of the principal amount of the term loan, which is due when the term loan becomes due or upon the prepayment of the facility. If the Company elects to prepay the loan, there is also a prepayment fee between 1% and 3% of the principal amount of the term loan depending on the timing and circumstances of prepayment.
The Loan Agreement contains customary representations, warranties and covenants of the Company, as well as customary events of default and indemnification obligations of the Company. The foregoing description is only a summary of certain provisions of the Loan Agreement and is qualified in its entirety by the terms of the Loan Agreement, a copy of which will be filed as an exhibit to the Company’s Form 10-Q for the quarter ended June 30, 2014.
A copy of DURECT’s press release is attached as Exhibit 99.1 hereto and incorporated by reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information under Item 1.01 is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| 99.1 Press Release of DURECT Corporation dated June 26, 2014 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DURECT Corporation | ||||||
| Date: June 26, 2014 | By: | /s/ Matthew J. Hogan | ||||
| Matthew J. Hogan | ||||||
| Chief Financial Officer | ||||||
INDEX TO EXHIBITS
| Exhibit |
Description | |
| 99.1 | Press Release of DURECT Corporation dated June 26, 2014 | |
Exhibit 99.1
DURECT Secures $20 Million Debt Financing
CUPERTINO, CA, June 26, 2014 /PRNewswire-FirstCall/ — DURECT Corporation (Nasdaq: DRRX) today announced that it had entered into a Loan and Security Agreement (the “Loan Agreement”) with Oxford Finance LLC, pursuant to which Oxford agreed to make a term loan to the Company in the principal amount of $20 million. The loan has a fixed interest rate of 7.95% per annum with interest only payments for the first 18 months and repayment of all principal and interest by July 1, 2018. In addition, the Company paid a $150,000 facility fee at closing and, at maturity or earlier termination, the Company must pay Oxford an additional one-time payment equal to 8% of the initial principal amount of the term loan. The Company may use the proceeds of the Loan Agreement for general working capital and to fund its business requirements.
“We’re pleased to secure this financing on favorable terms which gives us more flexibility to advance our pipeline of products in development,” stated James E. Brown, President and CEO of DURECT Corporation.
About DURECT Corporation
DURECT is a specialty pharmaceutical company developing innovative drugs for pain and other chronic diseases, with late-stage development programs including REMOXY®, POSIDUR™, ELADUR®, and TRANSDUR®-Sufentanil. DURECT’s proprietary oral, transdermal and injectable depot delivery technologies enable new indications and superior clinical/commercial attributes such as abuse deterrence, improved convenience, compliance, efficacy and safety for small molecule and biologic drugs. For more information, please visit www.durect.com.
About Oxford Finance LLC
Oxford Finance is a specialty finance firm providing senior secured loans to public and private life sciences and healthcare services companies worldwide. For over 20 years, Oxford has delivered flexible financing solutions to its clients, enabling these companies to maximize their equity by leveraging their assets. In recent years, Oxford has originated over $2 billion in loans, with lines of credit ranging from $500 thousand to $50 million. Oxford is headquartered in Alexandria, Virginia, with additional offices in California, Massachusetts, Illinois and North Carolina. For more information visit www.oxfordfinance.com.
DURECT Forward-Looking Statement
The statements in this press release regarding the Loan Agreement, the potential benefits and uses of our drug candidates, collaborations with third parties and potential business development, licensing and commercialization activities are forward-looking statements involving risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements. Potential risks and uncertainties include, but are not limited to, the risk that we will be unable to repay the loan when due, potential adverse effects arising from the testing or use of our drug candidates, the potential failure of clinical trials to meet their intended endpoints, our potential failure to maintain our collaborative agreements with third parties or consummate new collaborations and risks related to our (and our third party collaborators where applicable) ability to design, enroll, conduct and complete clinical trials, complete the design, development, and manufacturing process development of product candidates, manufacture and
commercialize product candidates, obtain marketplace acceptance of product candidates, avoid infringing patents held by other parties and secure and defend patents of our own, and manage and obtain capital to fund operations and expenses. Further information regarding these and other risks is included in DURECT’s Quarterly Report on Form 10-Q for the quarter ending March 31, 2014 under the heading “Risk Factors.”
NOTE: POSIDUR™, SABER® and TRANSDUR® are trademarks of DURECT Corporation. REMOXY, POSIDUR, ELADUR and TRANSDUR-Sufentanil are drug candidates under development and have not been approved for commercialization by the U.S. Food and Drug Administration or other health authorities.
| SOURCE: | DURECT Corporation |
| CONTACTS: | Matthew J. Hogan, Chief Financial Officer, DURECT 408-777-4936 |
| Shelly Davis, Vice President, Marketing, Oxford Finance, 888-471-0174 |