e-Therapeutics PLC (AIM:ETX, OTCQX:ETXPF) said it has agreed to raise almost £29 million and then to delist from AIM, citing a lack of support from UK institutional investors.
Chief executive Ali Mortazavi said the computational drug discovery company believes its current valuation "in no way reflects" its position as a leading 'techbio' company with a maturing pipeline of differentiated assets and specialist expertise in the most disruptive and attractive areas in biotech.
"It is the board's view that there could be a far larger pool of capital available as an unlisted company as opposed to an AIM-listed one and that this situation is very unlikely to change in the near future," he said.
The proposed fundraise of £28.90 million will be via a subscription priced at 15p per share by M&G funds and Richard Griffiths, which are existing shareholders of the company with around 47% and 29% stakes respectively. This would top up a current cash bank balance of roughly £18 million.
The company said it intends to explore the option of listing on NASDAQ in due course.
Mortazavi said the board has been contemplating delisting from the AIM market for over a year now.
"However, given the dramatic rise in the US biotech indices in Q3 2023 which has seen record amounts of capital being raised, we decided to remain on the AIM market and embarked on a capital raise roadshow in February-March 2024.
"Despite the firm commitments given by our two largest shareholders, the board was extremely disappointed by the lack of institutional UK interest in our innovative, technology-driven value propositions."
He said ETX struggled to get sufficient engagement from the vast majority of the institutions who were approached, a trend that "has been a consistent theme over the last four years", meaning the company has primarily raised funds through the current two key shareholders.
"As such, we believe that there is a limited available audience on the AIM market for companies such as ETX."
With the new cash, the company plans to advance multiple RNAi pipeline assets from its GalOmic platform towards the clinic and initiate clinical trials on one program, as well as keeping its early pipeline well populated with new candidates.
ETX said the investment is to accelerate development and integration of AI systems into its HepNet discovery platform.