8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) August 2, 2012

FURIEX PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-34641	27-1197863
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer ID Number)
3900 Paramount Parkway, Suite 150, Morrisville, North Carolina		27560
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (919) 456-7800

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement

On August 2, 2012, Furiex Pharmaceuticals, Inc. (the “Company” or “Furiex”) and our wholly owned subsidiaries, APBI Holdings, LLC, Development Partners, LLC and Genupro, Inc. (the “Subsidiaries”), as Borrower, entered into an Amended and Restated Loan and Security Agreement (the “Loan Agreement”) with MidCap Funding III, LLC (“Midcap”), in its capacity as administrative agent (“Agent”) for Midcap, Midcap Funding RE Holdings, LLC and Silicon Valley Bank (“SVB”) as lenders (the “Lenders”), pursuant to which Furiex borrowed an aggregate of $40.0 million (the “Loan”). The Loan Agreement is for an additional $30.0 million and amends our prior loan agreement with MidCap and SVB for $10.0 million by resetting the maturity date to August 2016 for a total amount of $40.0 million.

The Loan bears interest at a fixed rate of 10.00%, subject to adjustment under specified conditions. Interest accrues daily and is payable on the first day of the following month, in arrears. Principal payments on the Loan Agreement begin in August 2013, are due the first day of each month and will be paid on a ratable monthly basis until maturity. We must pay a final payment fee equal to 2.5% of the original principal amount of the Loan and a prepayment fee of 4% in year one, 3% in year two, and 1% in year three of the prepayment amount upon the acceleration of the Loan due to an event of default or if we opt to prepay the Loan.

As part of this new agreement, we will be required to maintain a cash balance with SVB in an amount of not less than $7.5 million until August 2014; $5.0 million until August 2015; and $2.5 million until the maturity date. In addition, we must maintain our primary deposit and investment accounts with SVB, consisting of at least 50% of our total cash and cash equivalents balance.

The obligations of the Company and our Subsidiaries under the Loan Agreement are secured by a first priority lien on substantially all of the Company’s and our Subsidiaries’ existing and after-acquired assets, excluding their intellectual property (but including the proceeds thereof). The obligations of the Company and our Subsidiaries under the Loan Agreement are also secured by a first priority lien on the equity interests of the Company in our Subsidiaries.

Under the Loan Agreement, the Company and our Subsidiaries are subject to affirmative covenants customary for financings of this type, including the obligations to maintain good standing, provide certain notices to the Lenders, deliver financial statements to the Lenders, maintain insurance, discharge all taxes, protect their intellectual property and protect the collateral. The Company and our Subsidiaries are also subject to negative covenants customary for financings of this type, including that they may not enter into a merger or consolidation or certain change of control events, incur liens on the collateral, incur additional indebtedness, dispose of any property, change their jurisdictions of organization or their organizational structures or types, declare or pay dividends (other than dividends payable solely in Common Stock), make certain investments or acquisitions, enter into certain transactions with affiliates, in each case subject to certain customary exceptions.

The Loan Agreement provides that events of default include failure to make payment of principal or interest on the Loan or any other extension of credit by Agent or the Lenders for Borrower’s benefit when required, failure to perform certain obligations under the Loan Agreement and related documents, defaults in certain other indebtedness and certain other events including adverse actions taken by the FDA or other governmental authorities. Upon the occurrence of any event of default, the Company’s and our Subsidiaries’ obligations under the Loan Agreement will bear interest at a rate equal to 4% above the rate of interest applicable to such obligations to the occurrence of the event of default.

The description of the Loan Agreement, the Omnibus Amendment and Reaffirmation Agreement, and the Secured Promissory Note provided above are qualified in their entirety by reference to the full and complete terms contained in the Loan Agreement, Omnibus Amendment and Reaffirmation Agreement, and Security Promissory Note, which will be filed as exhibits to Furiex’s Quarterly Report on Form 10-Q for the fiscal quarter ending September 30, 2012.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth above in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

Item 8.01. Other Events.

On August 2, 2012, Furiex issued a press release announcing the Loan Agreement. A copy of the press release is attached as Exhibit 99.1.

The information in this Item 8.01, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press release issued August 2, 2012.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

	FURIEX PHARMACEUTICALS, INC.
Date: August 8, 2012	/s/ Marshall H. Woodworth
	Marshall H. Woodworth
	Chief Financial Officer

EX-99.1

Exhibit 99.1

Contact

Media/Analysts/Investors:

Sailash Patel

919.456.7814

sailash.patel@furiex.com

Furiex Pharmaceuticals Amends Current Loan and Security Agreement, Adding an Additional $30.0 Million

MORRISVILLE, N.C. (August 2, 2012)—Furiex Pharmaceuticals, Inc. (NASDAQ: FURX) announced today it has restructured its Loan and Security Agreement (Agreement) with MidCap Financial LLC and Silicon Valley Bank to add $30.0 million in capital to the existing $10.0 million loan.

On August 18, 2011, Furiex entered into the Agreement for $10.0 million with a fixed interest rate of 10.25% per annum. Interest accrued monthly and was payable in arrears on the first day of the following month. The $10.0 million principal balance was due August 1, 2015, with principal payments beginning on August 1, 2012, payable on a ratable monthly basis on the first day of each month until maturity.

The amended Agreement provides for a loan totaling $40.0 million with a fixed interest rate at closing of 10.00% per annum, subject to adjustment in certain events. Interest will accrue daily and will be payable in arrears on the first day of the following month. The total principal balance is due August 1, 2016, with principal payments beginning on August 1, 2013, payable on a ratable monthly basis on the first day of each month until maturity. Furiex intends to use the additional capital to support Phase III clinical trial costs associated with the continued development of MuDelta.

“As we progress the Phase III development of MuDelta, this transaction provides us with additional financial flexibility to help us reach our development goals,” said Marshall Woodworth, chief financial officer of Furiex. “We are pleased to have successfully closed on this source of capital and to continue our relationship with MidCap Financial LLC and Silicon Valley Bank.”

About Furiex

Furiex Pharmaceuticals is a drug development collaboration company that uses innovative clinical development design to accelerate and increase value of drug development programs by advancing them through the drug discovery and development process in a cost-efficient manner. Our drug development programs are designed and driven by a core team with extensive drug development experience. The company collaborates with pharmaceutical and biotechnology companies and has a strong, diversified product portfolio and pipeline with multiple therapeutic candidates, including one Phase III-ready asset, two compounds in Phase III development, one of which is with a partner, and two products on the market. The company’s mission is to develop innovative medicines faster and at a lower cost, thereby improving profitability and accelerating time to market while providing life-improving therapies for patients. For more information, visit www.furiex.com.

About MidCap Financial

MidCap Financial is a commercial finance company focused on middle market lending across the healthcare sector. MidCap specializes in $5 million to $200 million loans and since launching in 2008 has deployed over $1 billion in capital. The company is headquartered in Bethesda, MD, with offices in Chicago and Los Angeles. For more information, please visit www.midcapfinancial.com.

About Silicon Valley Bank

Silicon Valley Bank is the premier bank for technology, life science, cleantech, venture capital, private equity and premium wine businesses. SVB provides industry knowledge and connections, financing, treasury management, corporate investment and international banking services to its clients worldwide through 27 U.S. offices and seven international operations. (NASDAQ: SIVB) www.svb.com.

Silicon Valley Bank is the California bank subsidiary and the commercial banking operation of SVB Financial Group. Banking services are provided by Silicon Valley Bank, a member of the FDIC and the Federal Reserve System. SVB Financial Group is also a member of the Federal Reserve System.

Except for historical information, all of the statements, expectations and assumptions contained in this news release are forward-looking statements that involve a number of risks and uncertainties. Although Furiex attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors which could cause actual results to differ materially include the following: continuing losses and our potential need for additional financing; the risks and expense of continuing the research and development activities of our existing candidates; changes in the safety and efficacy profile of our existing candidates as they progress through research and development; potential U.S. Food and Drug Administration changes to its regulatory guidance; the risk of finding collaborators for our late-stage product candidates; progress of product candidates in clinical trials and regulatory approvals as it relates to receiving future milestone payments; inability of our existing collaborators to effectively market approved products for which we receive royalty and sales milestone payments; and the other risk factors set forth from time to time in the SEC filings for Furiex, copies of which can be found on our website.