Cyclopharm (ASX: CYC) will raise around A$2.1 million in a fully underwritten one for four renounceable rights issue to fund Cyclopet’s operations and the start of the Technegas clinical trial in the United States.
The company plans to issue 11.6 million shares at $0.18 each.
Under the rights issue, which is underwritten by CVC Managers, there will also be a shortfall facility, under which eligible shareholders can subscribe for additional shares in the company, which may be issued from any shortfall.
The proceeds of the rights issue will go towards funding the operating costs of Cyclopet, support the legal proceedings Cyclopet has begun against the Australian Nuclear Science and Technology Organisation and fund the commencement of the Technegas clinical trial in the U.S.
While the market for products manufactured by Cyclopet has been encouraging in 2012, competition from government owned enterprises requires additional capital to support this venture.
Technegas
Cyclopharm's product Technegas was discovered in 1984 and since that time, more than 1,000 Technegas systems have been installed in hospitals throughout the world and more than 1.7 million Technegas patient studies have been completed.
The Techengas system is a device which creates Technegas – an ultrafine dispersion of Tc99m labelled carbon used for nuclear medicine ventilation/perfusion (V/Q) exams.
V/Q imaging is the primary technique used to diagnose pulmonary embolism, a life threatening condition.
Technegas has proven to be superior compared to the typical aerosol agents including Xenon-133 gas, Krypton-85 gas and Technetium 99m.
A U.S. Food and Drug Administration clinical trial is now underway with the first installation in October this year.
The clinical trial costs are estimated to be about US$4 million in total with expenditure of $800,000 expected within the next 12 months.
The balance of the trial costs is expected to be funded through a subsequent capital raising next year.
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