On Tuesday, cancer immunotherapy developer Imugene [ASX:IMU] announced an $80 million placement to fund its clinical pipeline.
The placement represents a discount of 11.1% to the share price at closure on 9 September 2022.
IMU shares were largely flat on Tuesday but are trading 50% down year to date.
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Imugene’s $80 million placement
Imugene has said both its current cash position and the funds raised via the placement would provide the financial foundation for its ‘deep pipeline of clinical programmes’ with R&D rebates expected to make a further impact.
IMU also hinted that future partnering and licensing opportunities could extend this financial situation to an even greater degree but did not reveal what these might entail or who they could involve.
The placement specifics:
- A total of 400 million new shares to placement subscribers at a price of 20 cents per share
- The issue price represents a discount of 11.1% to the last close on 9 September 2022 (22.5 cents), and a discount of 12% to the five-day VWAP for 9 September (22.7 cents)
- New shares issued under the placement represent around 6.8% of existing ordinary shares
- For every two new shares subscribed, Imugene intends to issue a free new option attached (a total of 200 million new options will be offered to placement subscribers under a placement options offer)
- New options are priced at 33 cents and have a set expiration date of 31 March 2026
If fully exercised, options issued under the Placement will provide a further $66 million in funding for the company’s clinical pipeline.
Two ‘leading’ institutional investors have already subscribed to the placement.
Imugene’s Founder and Executive Chairman Paul Hopper commented on the offer:
‘This capital raising ensures a long runway for the existing programmes while also providing flexibility to add complementary assets should attractive opportunities present. The ability to introduce two high calibre institutional investors onto the share register following what has been a volatile period across biotechnology indices speaks to the quality of the Company’s unique clinical platforms. With minimal dilution to existing shareholders of only 6.8%, and with such a definitive statement of investment support for Imugene by two prominent funds, the Board believes we have a significant opportunity to maximise value for all Imugene shareholders.’
Imugene’s Managing Director and CEO Leslie Chong also offered the following thoughts:
‘We are pleased to strengthen the company’s balance sheet and give ourselves an unimpeded runway to progress the numerous clinical trials that we have ongoing. By having these multiple shots on goal well-funded gives them the best chance of success, which we expect will translate into shareholder value and improved patient outcomes.’
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