Scancell signs up to US$25M debt facility for melanoma Phase 3
The first US$7 million draw needs a shareholder vote, while later tranches depend on U.S. listing steps and the first Phase 3 site.
Adrian Kessler
A loan agreement for up to US$25 million gives an advanced melanoma trial another funding route after Scancell Holdings plc LONSCLP signed the facility with BlackRock-managed funds on Thursday, Sept. 24. The first US$7 million draw requires shareholder approval, and access to a further US$8 million depends on U.S. listing steps and the opening of the first Phase 3 clinical site.
The lender has committed four tranches, but Scancell has not yet drawn the facility. Its shareholders are expected to vote at an extraordinary general meeting in October, with the meeting notice and exact date still to come.
Scancell is an Oxford-based developer of experimental cancer immunotherapies whose lead program targets advanced melanoma. The proposed debt sits alongside an equity financing and U.S. listing plan announced in July, leaving its trial funding dependent on several separate approvals and milestones.
A post-announcement share reaction could not be established from the London quote page at filing time. The next operational target is to begin the Phase 3 trial by the end of 2026, with initial progression-free survival data targeted for the second half of 2028, according to Scancell's trial authorization announcement.
The Loan Carries Cash Interest And Potential Dilution
The Sept. 24 release says the first draw would follow the shareholder vote. The next two tranches, together worth US$8 million, are expected to become available after the planned U.S. listing transactions and the first Phase 3 site opens. Scancell expects to draw those tranches after the listing steps are complete.
The remaining tranche can be drawn through Dec. 31, 2027, subject to a minimum equity fundraising threshold. Scancell did not state a cash runway in the release, so the facility cannot be treated as fully available cash for the study.
Under the Sept. 24 agreement, term debt accrues interest at 10.50 per cent a year, paid monthly in cash. Convertible debt accrues 10.95 per cent a year, with the interest added to principal each month. Up to US$5 million of the first three tranches can be converted into Scancell shares at the lender's option.
The conversion price is set at a 30 per cent premium to the equity fundraising price announced on July 23, subject to the planned share consolidation. Scancell will also issue warrants tied to drawdowns, with the number of shares calculated from 4.5 per cent of each draw and the applicable subscription price.
"The debt facility is an important part of an equity and debt package in conjunction with the planned merger that allows Scancell to proceed at pace to initiate and execute the global registrational Phase 3 trial for its lead programme, iSCIB1+."
Scancell chief executive Phil L'Huillier said this in Thursday's release.
Under the Sept. 24 agreement, after an 18-month interest-only period, the standard schedule calls for 24 monthly instalments of principal and interest. If Scancell raises at least US$100 million in cumulative equity funding, repayment instead begins after 24 months and runs over 18 monthly instalments. The debt is secured over substantially all assets of Scancell and its subsidiary, and a change of control would require full repayment.
The Trial Tests An Added Melanoma Treatment
The company's August trial notice describes a randomized, double-blind study planned for 550 people with unresectable advanced melanoma across about 90 sites. One arm receives iSCIB1+ with ipilimumab and nivolumab; the other receives a placebo with those two drugs. Progression-free survival is the primary endpoint, with overall survival a secondary endpoint.
The U.S. Food and Drug Administration cleared the trial's investigational new drug application in January, and the U.K. Medicines and Healthcare Products Regulatory Agency granted trial authorization in August. Those steps permit a study; they do not establish that iSCIB1+ works or authorize its sale.
The iShares Biotechnology ETF NASDAQIBB closed at US$210.81 at 4 p.m. EDT on Sept. 22, a dated U.S. biotech sector reference ahead of Scancell's announcement. Scancell's planned progression-free survival comparison will be the primary test of its treatment's benefit.
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Shareholders are expected to vote on the drawdowns and warrants at an extraordinary general meeting in October 2026. Approval would unlock the first US$7 million; the company has yet to announce the meeting date.
