ImmuPharma PLC (AIM:IMM)CEO Tim McCarthy talked with Proactive about the company's recent £2.91 million oversubscribed equity fundraising, highlighting investor confidence and future business development plans. The fundraising was led by long-term shareholder Lanstead Capital, which contributed two-thirds of the total amount.
McCarthy explained that this funding will be used to accelerate work on the company's autoimmune platform, P140, which has the potential to treat multiple autoimmune diseases. He noted that the recent positive market response to ImmuPharma’s news flow drove increased interest in the stock, with shares rising from 1.5p to as high as 7p.
A significant portion of the discussion focused on the mechanics of the agreement with Lanstead, which allows the company to benefit from a rising share price while securing financial stability. McCarthy emphasized that this year is expected to be transformative for ImmuPharma, with upcoming news flow and potential business deals in the autoimmune sector.
“This is the year that this is all going to come together,” McCarthy stated, reiterating confidence in the company’s strategic direction and commitment to delivering value for shareholders.
Proactive: Tim, great to have you back again so soon. A month ago, you were here discussing key clinical findings on your P140 platform. Today, we're talking about last week's oversubscribed equity fundraising of £2.91 million. It seems like a strong vote of confidence in the company. Can you take us through the details of the fundraise?
Tim McCarthy: Good morning, Stephen. Yes, it wasn’t too long ago that I was here. The fundraising we announced last week ties into our previous discussion on January 9th when we released new data on our autoimmune platform, P140. This work is groundbreaking and supports our hypothesis that P140 can treat autoimmune diseases without side effects.
Following that announcement, we saw a very positive market response. Our share price, which had been around 1.5p to 2p, rose to as high as 7p. We traded approximately £400 million in our shares in January. This demonstrated a strong correlation between positive news flow and market performance.
Several longstanding shareholders, including Lanstead Capital, approached us with interest in participating in a fundraise. After discussing with our board and advisers, we decided to proceed with a relatively small fundraise. This allows us to accelerate P140 developments and strengthen our position in discussions with pharmaceutical companies.
Proactive: You raised £2.91 million in total. Could you break down how that was split between Lanstead Capital and other investors?
Tim McCarthy: Certainly. Lanstead has been one of our key institutional shareholders since 2016. They have consistently supported us, especially during challenging market conditions for small-cap biotech companies. In this fundraise, approximately two-thirds of the amount came from Lanstead, with the remaining one-third from other longstanding institutional shareholders.
The fundraise was oversubscribed, and while investors were willing to commit more, we decided to keep it at the level we had planned. Importantly, it was conducted at a 3.75p placing price, representing a 12.9% discount, which is far lower than the 40-75% discounts often seen in small-cap fundraisings. This reflects investor confidence in our growth strategy.
Proactive: Can you explain the mechanics of the agreement with Lanstead? I understand that if your share price goes above 5p, your total monthly settlements from Lanstead could exceed their original investment. But if it drops below 5p, the payments will be lower.
Tim McCarthy: Yes, that’s correct. This is our seventh funding arrangement with Lanstead, and there's often some misunderstanding about how it works.
Lanstead's £1.875 million investment is placed into a sharing agreement. We receive monthly payments based on our share price against a 5p benchmark. If our share price averages at or above 5p, we receive the full £1.875 million or potentially more. If the price drops below 5p, we receive less.
We’ve adjusted the usual two-year period for these agreements down to just seven months. Additionally, an existing Lanstead agreement has been compressed from seven months into two, which means we are getting those funds faster.
We were cautious about taking additional funding but decided that having the money now, rather than spread over time, allows us to reinvest in P140, strengthen our negotiating position, and demonstrate financial stability when engaging with major pharmaceutical companies.
Proactive: You’ve mentioned that autoimmune deals are attracting significant interest. Can you provide more context on the market landscape?
Tim McCarthy: The autoimmune space is a very active sector for pharmaceutical deals. Over the past 18 months, there have been 11 transactions valued at over $1 billion each, excluding royalties. These deals typically include upfront payments of between $50 million and $150 million, with additional milestone payments and royalties on sales.
For ImmuPharma, even securing a deal at the lower end of that range would significantly exceed our current market capitalization. This is why we are confident that we are on the right path with P140 and why we structured the fundraising to support its development.
Proactive: What are the key takeaways for potential and existing investors?
Tim McCarthy: As I’ve said before, this is the year of delivery for ImmuPharma. The news we released in January was transformational, and we expect continued strong news flow throughout the year, including updates on P140 and potential business development deals.
We have spent the past two to three years laying the groundwork, and now we are in a position to deliver results. The fundraising reflects our confidence in the future, and we believe this year will drive significant value for shareholders.
Proactive: Tim, it sounds like 2025 is going to be a very busy year for ImmuPharma. Thank you for joining us today.