MGC Pharmaceuticals Ltd (LSE:MXC, OTC:MGCLF, ASX:MXC) is raising US$7.9 million (A$12.46 million, £6.5 million) at an issue price of US$0.255 (A$0.40, £0.21) per share on a post-consolidation basis.
The US$7.9 million is the minimum amount required to fund MGC Pharma’s full business plan over the next 12-month period.
The company is focused on the investigational new drug (IND) applications of CimetrA and CannEpil in the USA as it continues to produce and develop innovative medicines for unmet medical needs.
Use of the funds will go to the following:
- CannEpil®. Initiation of Phase 2 clinical trials (in Australia) and submission of the USA IND Application (Food and Drug Administration) – around US$2.6 million;
- CimetrA®. Completion of Phase 2B dose finding study in Israel, and submission of the USA IND application (Food and Drug Administration) – around US$2.4 million;
- Marketing and pharmaceutical conferences costs – around US$1.2 million;
- Working capital around US$1.3 million; and
- Costs of placement including ASX, LSE costs and prospectus submission in the UK around US$0.4 million.
Raise details
MXC has received binding commitments from sophisticated and professional investors for the money, with shares expected to be issued next week after the 1:1000 consolidation of capital, as approved by shareholders at the General Meeting on October 25.
Placement participants will also receive one free attaching option for every two shares subscribed for and issued. The options will be exercisable at US$0.32 ($0.50) (on a post-consolidation basis), with a five-year term.
Following the placement, 31,000,000 fully paid ordinary shares and 15,500,000 options will be issued.
“We are delighted to have secured this firm subscription following shareholder approval at the General Meeting and this underscores the unwavering support the company has from high-net-worth individuals, highlighting the trust they have in MGC’s trajectory and the impact the company are poised to make in the pharmaceutical industry,” MGC Pharma managing director and CEO Roby Zomer said.
“With this significant investment and the strong backing of our investors, MGC is well-positioned to drive innovation, accelerate growth and achieve remarkable milestones in the coming months.”