The firm said it will use the proceeds from the financing for its general corporate purposes, including the commercialization of its pain relief medicine tramadol in Europe.
Hercules Technology Growth Capital (HTGC) will also be able to buy 543,104 common shares of Labopharm at a price of $2.71 per warrant. These warrants will have to be held by HTGC for four months and will expire five years after the date of the grant.
In addition, Labopharm will grant HTGC the option to invest up to $1m in its next equity financing.
The loan bears interest at 11.95% per year and is repayable on July 1, 2008.