Oxford Pharmascience “at an exciting stage” as it raises £1.1 million via placing

Drug delivery specialist Oxford Pharmascience (LON:OXP) this morning announced a placing to raise more than £1.1 million to help it develop its business in Brazil as well as initiate commercialisation of its pipeline of NSAID and statin-based technologies.

Shares in the firm were down 14 per cent at 1.6 pence each by lunchtime today, but HB Markets – which rates the firm as a ‘speculative buy’ – said that Oxford Pharmascience is “at an exciting stage” of discussions with global drug companies to apply its formulation technologies to over-the-counter (OTC) and prescription drugs.

£1,130,000 before expense will be raised through the placing of 113 million news shares at a placing price of one pence per share. Oxford Pharmascience’s house broker Hybridan has already found homes for the new shares. David Norwood, the firm’s chairman, and chief technology officer Marcelo Bravo are subscribing for 10 million and 2.5 million new shares respectively.

Oxford Pharmascience said that the net proceeds of the placing will be used by it to continue developing its business in Brazil and to progress and initiate commercialisation of its pipeline that is focused on technologies to reposition and add value to off-patent NSAIDs and statins. 

“Being able to raise this additional finance in difficult market conditions, underlines the strength of our technology and business plan,” said Nigel Theobald, the firm’s chief executive. “The fundraising will enable us to take full advantage of the opportunities that are available to us and accelerate the scale up of our business.”

Oxford Pharmascience believes it has an opportunity to help pharmaceutical companies differentiate their products for the generic drugs market with its drug delivery knowhow. Its technology portfolio includes taste-masking, chewable tablets, liquid suspensions and solid-state suspensions (“soft chews”).

The firm says that its technology provides for “outstanding” taste masking, enhanced drug stability and potential for “tuneable” drug release properties.

HB Markets pointed out today that, as well as its discussions with global drug companies about using its technologies, the firm is already selling its products for health supplements to a major Brazilian pharmaceutical group: Aché Laboratórios – one of Brazil’s largest pharmaceutical companies. “This business alone should be capable of covering all of the company’s expenses in three years’ time,” said the broker.

However, HB market stressed that the main attraction of the company for investors is the development of technology to reformulate a number of well-established OTC and prescription medications. “The company is now effectively ready to move into manufacturing with its patented version of ibuprofen,” it said, pointing out that the ibuprofen product could be on the market by 2013.

HB Markets has set a target price of five pence each for Oxford Pharmascience’s shares.