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ValiRx secures cash to fund VAL201 trial through to completion

In total, European High Growth Opportunities Securitisation Fund has agreed to make at least £7.3mln available to ValiRx bosses
doctor with patient
VAL201 is currently being trialled in prostate cancer patients

ValiRx PLC (LON:VAL) has struck a financing deal that will fund the ongoing Phase II trial of VAL201, its prostate cancer drug, through to completion.

European High Growth Opportunities Securitisation Fund has agreed to subscribe for a total of 213mln shares at a price of 0.6p each, raising gross proceeds of £1.28mln.

READ: Letters of Intent signed to fund final stage trial of ValiRx's lung cancer drug

The money will be drawn down in three equal tranches of £426,000, with the first tranche due next Wednesday (1 May). The second and third tranches will be drawn down on 21 May and 14 June, respectively.

As part of the agreement, ValiRx will have to pay a £92,667 fee following each of the tranches.

“This investment into the company at a premium to the recent share price is an exciting endorsement of our work to develop ground-breaking anti-cancer drugs and it will enable us to conclude the current trial of VAL201 and will provide us with a funding pathway to add real value to our VAL301 pre-clinical asset,” said chief executive Satu Vainikka.

More money committed

As well as the initial £1.28mln, EHGO has committed up to another £6mln in the form of convertible bonds which come with a 0% coupon rate. A first tranche of £500,000 will be followed by 22 additional tranches.

The funds can be converted into ValiRx shares within 12 months from issuance at a price equal to 95% of the lowest closing bid price in the 15 days immediately preceding the conversion.

EHGO also has various warrants that will allow it to buy more shares in the company further down the line.

“Having access to additional funds will provide ValiRx with the flexibility to invest in further research and development and a strengthened position when negotiating licensing and joint venturing deals with potential partners,” said CEO Vainikka.

ValiRx shares were down 14.3% to 0.45p on Friday morning.

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May 02 2019

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