18th Feb 2020 09:03
(Alliance News) - 4d Pharma PLC on Tuesday said it plans to raise at least GBP18 million to help fund its ongoing clinical studies and provide funding through a minimum of two clinical study readouts.
The pharmaceutical firm, which focuses on developing live biotherapeutic products, will issue no fewer than 36.0 million net shares pricee at 50 pence each through a placing and subscription. This will be conducted through an accelerated bookbuild run by N+1 Singer Ltd and Bryan Garnier & Co.
The 50p per share figure represents a 28% discount to 4d Pharma's Monday closing share price of 69.25p. On Monday morning, its shares were down 16% at 58.00p.
As part of a subscription agreement, 4d Pharma has exercised its right to compel US drug maker Merck & Co Inc to purchase USD5 million of ordinary shares. This will convert into 7.7 million new shares at the 50p issue price.
Following a bookbuild exercise, 4d Pharma also has entered subscription agreements with a number of accredited investors in the US. The amount of these agreements was not disclosed. Chardan Capital Markets LLC acted as the firm's US placing agent.
Further, a number of 4d Pharma's directors have said they plan to subscribe for a combined GBP2 million of shares under the fundraise.
Subscription and placing participants are to receive warrants, with one warrant awarded for every 2 placing or subscription shares. These are exercisable for five years after admission and have a 100p per share exercise price. 4d Pharma said it will not be applying to AIM to have the warrants admitted to trading.
"The net proceeds of the fundraising, together with the company's existing resources, are expected to support its ongoing clinical studies in IBS and oncology and to enable the company to continue to fund its operations to at least two clinical study readouts, as well as for general corporate purposes," said 4d Pharma.
The GBP18 million, along with the company's current resources, is expected to provide at least six months of working capital.
The fundraise is conditional on "certain resolutions" being passed at a general resolution.
Chief Executive Duncan Peyton said: "4d pharma is pleased to launch this funding round - its first since 2015 and in challenging market conditions for developers of new therapeutics - with strong support from existing and new investors, including our partner [Merck & Co] and other US investors in addition to those in the UK. This funding will enable us to reach important milestone data points in two clinical studies which we believe will represent material value inflection points as positive data, if generated, will provide strong further validation of our approach to developing live biotherapeutics."
By Anna Farley; [email protected]
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