Listed biotech firm secures US Government backed loan

Biotech company Tissue Regenix has received a US Government backed loan to assist with the potential impact of the ongoing COVID-19 pandemic.

The loan of $629,000 (£499,756) has been agreed and funds received through one of the Leeds-based company’s banking providers to help with overhead costs experienced in the US during the pandemic.

The loan has a two-year term and carries a 1% annual interest rate deferred for six months.

The total amount of the loan will not require repayment if the funds are used to support employee payroll, healthcare, utilities and rent payments within the US during the next two months.

Tissue Regenix is a regenerative medical devices firm, which also has a base in Texas.

It has today released a trading update to 31 March 2020, showing an 18% increase year on year in quarter one revenues.

The Group had a cash position of £1.7m as at 31 March 2020. The company previously announced, on 30 March 2020, that its available cash would fund its working capital requirements until at least the end of the second week of May 2020.

Following receipt of the loan, as well as ongoing cost saving initiatives, the Board now expects the cash runway to extend to at least the second week of July 2020.

A spokesman for the firm said: “The Board continues to be encouraged by discussions with potential investors however, there is no guarantee that any such discussions will result in near-term funding being made available to the company.

“Should this funding not be forthcoming before the company’s available cash runway expires, the Board will be required to take action to protect the interests of creditors and which, if necessary, is likely to result in a material reduction in any resulting value attributable to shareholders.”

Tissue Regenix says it has so far not experienced supply chain disruption due to the virus outbreak.

It adds: “At the company’s UK facility in Leeds, where the processing of the porcine product portfolio is undertaken, sufficient inventory to meet near-term demand has been manufactured.

“Therefore, production has been halted and technical staff furloughed until the advice from the UK Government is amended.

“The Board is currently not in a position to provide clarity on the outlook for 2020 or beyond. Further updates will be provided once there is greater visibility on the trading environment.”

Gareth Jones, interim chief executive officer, said: “The COVID-19 pandemic is a difficult and uncertain time for a number of businesses.

“However, we are encouraged by our ability to implement initiatives to address Government advice and ensure the health and well-being of our employees and stakeholders, whilst continuing to process our product portfolio at our facility in San Antonio.

“Securing additional funds through the US Government backed loan offers a level of financial security during these uncertain times, and provides an extended cash runway, allowing for the continuation of ongoing discussions with potential investors.”

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