Lexicon Pharmaceuticals Inc. (NASDAQ: LXRX) announced it has entered into a $100 million loan facility with Hercules Capital Inc. (NYSE: HTGC). The company received $55 million at closing to repay an existing loan facility with Oxford Finance.

The loan facility includes three tranches. The initial $55 million was funded at closing. A second $20 million tranche is available subject to achieving certain clinical, regulatory and financial milestones. A third $25 million tranche requires Hercules' consent and is available after drawing the second tranche.

The facility carries a floating interest rate equal to the prime rate plus 3.1%, with a floor of 9.85%. The loan provides an initial interest-only period of 18 months with potential for two six-month extensions. The principal and accrued interest must be repaid by May 4, 2030.

"By refinancing our existing loan facility with Hercules Capital, a strong partner with a history of supporting biotech innovation, we are expanding our access to non-dilutive capital and gaining additional flexibility to opportunistically deploy capital on value-creating initiatives," said Scott Coiante, Lexicon's chief financial officer.

Lexicon's obligations are secured by a first lien on all company assets and include customary covenants, including a minimum cash covenant beginning June 1, 2027. The covenant is subject to extension upon achieving certain clinical and financial milestones.

The biopharmaceutical company focuses on developing medicines for neuropathic pain, hypertrophic cardiomyopathy, obesity and metabolic disorders, and other cardiometabolic conditions. The information is based on a company press release.