Durect, a California-based biotech startup, has arranged to get a $20 million loan from Oxford Finance, an Alexandria, Va.-based firm that specializes in financing healthcare and life science companies. It's a good deal for Durect, which developes pain medication and other treatment for chronic diseases. Durect's stocks fell by nearly a third in February after the FDA chose not to approve one of its medications, sending it back for more safety testing.
Getting any medication through all of the development and approval stages is incredibly difficult and fraught with risk for a company and its investors. It's why biotech stocks are often watched as the precursor for future tech stock problems and why, when they do usher a drug to patients successfully, their profits soar.
"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 Brown, president and CEO of Durect in a release.
According to the statement, the loan will be used to keep the company going, presumably to get more safety trials completed and eventually get another medication approved by the FDA. Durect has drawn plenty of interest in recent years for the promise of its pain medications to not only be simpler and safer to use, but also to be less likely to cause addictions leading to their abuse.
