Zealand Pharma has been granted a loan facility of EUR 90 million by the European Investment Bank, EIB, the biotech company announced this on Friday.

”We are very pleased with the EIB’s approval and support for our pipeline investments. This loan facility will further strengthen Zealand Pharma’s financial position and enable us to invest in our differentiated obesity assets while better positioning us to secure commercial partnerships,” said Henriette Wennicke, CFO of Zealand Pharma, in the announcement.

The loan is divided into three parts, or tranches, of EUR 50 million, EUR 20 million and EUR 20 million respectively.

The disbursement of each tranche is subject to the achievement of agreed milestones, which is already the case for the first tranche of EUR 50 million, which is expected to be made available to Zealand in early 2024.

Each sub-loan has a term of six years, and interest is partly due periodically, while part is deferred until the loan matures, according to Zealand Pharma.

The biotech company has also entered into a warrant agreement with the EIB, which will receive warrants when Zealand draws on a tranche. The warrants will allow EIB to subscribe for new shares in Zealand at market price.

It is not clear how the terms are structured, but according to Zealand Pharma, the loans will be made available on competitive terms.

The European Investment Bank (EIB) is owned by the EU Member States and offers long-term financing of projects, guarantees and advisory services to further EU objectives.