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Allergy Therapeutics (LON:AGY) has outlined plans to raise up to £12mln via a share placing at a modest discount to last night’s closing price.
It said it will issue stock at 28p, using the proceeds to invest for new product development.
This, it said, will help it achieve a ‘step change in the size of its total addressable markets, strengthen its balance sheet and accelerate growth’.
Specifically, it is looking to create new products aimed at tackling food allergies and accelerating work on its inoculation against the house dust mite.
"We have seen an increase of our revenue growth rate during the first four months of the year despite flat markets,” said chief executive Manuel Llobet, after the company revealed sales since the year-end had grown 15%.
“We believe that this continuing increased demand for our products highlights the strong profile of our portfolio and, in particular, our short course aluminium free allergy vaccines driving double digit revenue growth in our European markets.”
The company has developed a suite of products aimed at common pollen allergies that have created a very sound business here in Europe.
Analysts reckon a long-term opportunity will come in the States where the company’s flagship product, Pollinex Quattro, is set to hit the market in the next three to four years.
In the meantime, the latest funding provides the opportunity to broaden out the portfolio.
It will work on a licence for a newly acquired technology for virus-like particles to develop Polyvac Peanut. This, as the name suggests, is for peanut allergy and opens the door to an US$8bn a year market opportunity.
Work on Acarovac Quattro, for dust mite and currently in phase one clinical trials, will also receive a boost, plus the firm is looking at other areas of research & development (R&D).
The shares, up61% in the last year, eased back 1.67p in afternoon trade at 29.7p.
Panmure Gordon analyst, Dr Mike Mitchell, repeated his ‘buy’ recommendation and 47p a share price target following this morning’s announcement.
Referring to the Allergy’s plans, he said: “These represent substantial new market opportunities and we will be updating our view (forecasts, valuation) in the light of the further announcements.”