Peregrine Pharmaceuticals, California-based biopharmaceutical major, has entered into a loan agreement for up to $10 million in proceeds.

Under the terms of the 36-month loan agreement, upon closing Peregrine will receive a first tranche of $5 million. In addition, the loan agreement includes an option to acquire a second $5 million tranche in the future, upon Peregrine's satisfaction of certain conditions.

For the first six months, the payments are interest-only, followed by principal and interest payments amortized over the next 30 months.

MidCap Financial LLC and BlueCrest Capital Finance are providing the debt financing.

According to official sources, the exercise price is equal to the average closing price of Peregrine's stock for the 20-day period prior to closing and, the net proceeds will be used to help fund the company's seven ongoing clinical trials in cancer and serious viral diseases and for general corporate purposes.

The initial funding of $5 million is expected to close within the next 10 days.

The scrip of Peregrine Pharmaceutical closed on Tuesday at $ 0.38 on Nasdaq, up 3% compared to its previous close.