Clinical-stage drug discovery company AdAlta Ltd (ASX:1AD) has raised $1.65 million in an oversubscribed placement to institutional and sophisticated investors. The raise, for which the company was initially targeting $1.23 million, was strongly supported by major shareholders and a life sciences-focused institutional investor.
The net proceeds will be used to complete the final analysis of the healthy volunteer cohort of the ongoing Phase I extension study of AD-214.
It will also assist in progressing partnering and/or licensing discussions for the AD-214 product to help move AD-214 into Phase II studies and beyond, and to evaluate synergistic external technology and product collaboration and transaction opportunities to expand and accelerate AdAlta’s product pipeline.
“This funding provides AdAlta with the capital needed to obtain the strongest result from our ongoing AD-214 Phase I extension study, that will in turn help materially progress partnering discussions for this asset,” said AdAlta chair Dr Paul MacLeman.
“We are pleased to once again receive strong support from existing and new institutional and sophisticated investors. We were able to accept the majority of oversubscriptions and will seek shareholder approval for the subscriptions of our two largest shareholders at a coming EGM,” Dr MacLeman said.
The placement
The company will issue each of the new shares at 2 cents per share, together with one quoted option offered for every two new shares subscribed for, with an $0.03 per share exercise price that expires May 29, 2024.
Furthermore, there will be one additional new option on the same terms for every two new shares subscribed for, subject to shareholder approval.
The share placement was oversubscribed and scaled back with accepted commitments exceeding the offer target by 34%.
Of the $1.65 million raised, $1.2 million was under the company’s existing placement capacity. The $450,000 in oversubscriptions will be subject to shareholder approval at an extraordinary general meeting (EGM) that’s expected to be held around December 14, 2023.
The company will issue 60 million new shares and 30 million new options under its available placement capacity.
Once approved and subject to receipt of funds, it will also issue 30 million additional new options; together with 22.5 million new shares and 22.5 million new options (the subject of oversubscriptions); plus 500,000 new shares and 500,000 new options to CEO and managing director Tim Oldham on the same terms as the offer, and 12 million new options to the lead manager, Peak Asset Management.