June 25, 2009 / 11:40 AM / 10 years ago

UPDATE 1-Labopharm debt deal lowers interest payments

* Extends repayment date with Hercules by one year

* Amendments to lower interest expense

(Adds details. In U.S. dollars)

TORONTO, June 25 (Reuters) - Labopharm Inc DDS.TO said on Thursday it shored up its credit lines with two key lenders, giving it more financial flexibility to advance its drug pipeline.

The small Canadian drugmaker extended the date to begin repaying a loan from Hercules Technology Growth Capital HTGC.O by one year to July 1, 2010. It also extended the maturity date of the loan to June 1, 2012 from Dec 1, 2011.

Labopharm also agreed not draw down the remaining $5 million of the $25 million facility.

The company said the amendments will result in lower interest expense in 2009 and provide additional liquidity through 2010 and 2011.

Labopharm also agreed to a $2.6 million credit facility with the National Bank of Canada.

The amendments gives the growing Montreal-based company financial breathing space as it tries to bring more products to market.

The company expects a response from the U.S. Food and Drug Administration on its once-daily depression treatment Trazodone in mid-July. It is also seeking approval in the United States, as well as Canada and Europe, for its Tramadol-acetaminophen twice-daily pain combination.

Last month it launched its once-daily Tramadol pain treatment in the United States along with marketing partner Purdue Pharma Products under the name Ryzolt. ($1=$1.16 Canadian) (Reporting by Scott Anderson; Editing by Derek Caney)

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