Imugene Ltd (ASX:IMU, OTC:IUGNF) is positioned to raise up to A$46 million via the issue of convertible notes and warrants to CVI Investments, Inc. to support its clinical pipeline.
Funds are to be put toward ongoing trials for IMU’s azer-cel, onCARlytics and VAXINIA programs, as the company anticipates key clinical data readouts in the coming 12 months.
The issuance involves A$20 million of senior, unsecured, zero-coupon, convertible notes and up to a further A$26 million through the issue of unlisted warrants.
This extends the company’s cash runway to the end of 2025, excluding any additional funds from warrant exercise.
Promising progress
“This funding reinforces our ability to advance Imugene’s range of highly prospective drugs and technologies further through the clinic,” Imugene CEO Leslie Chong said.
“With promising progress across the pipeline, attracting this investment underscores the confidence in our approach and affirms our growth potential.
“We’re very pleased to lock in this upfront funding, which also avoids some of the pitfalls of other convertible notes such as interest and security.”
Substantial capital injection
The convertible notes will have a maturity of five years and carry no coupon (ie are interest free). CVI may convert the convertible notes to ordinary shares at an initial conversion price equal to a 25% premium to Imugene’s closing price on December 20, with semi-annual price adjustments based on market prices.
Each of the five-year unlisted warrants has an exercise price of A4.94 cents per share.
CVI is an affiliate of Heights Capital Management, an investment arm of Susquehanna International Group, LLP — one of the world's largest privately held financial firms.
Heights has been investing in innovative firms in biotech, healthcare, engineering, technology and other sectors since 1996.
Cash saving initiatives
In addition to this financing, Imugene has put in place a number of operating initiatives to extend the cash runway of the company.
This includes streamlining manufacturing operations, optimising workforce levels and reducing administrative overheads. The result of these savings provides cash runway into late 2025 (excluding funds from possible warrant exercise).