genedrive PLC (LON:GDR) shares rose at open on Tuesday after the firm revealed that its hepatitis-C diagnostic has received what’s called ‘prequalification’ from the World Health Organisation, but soon reversed later after announcing plans for an £8mln fund-raising.
The good news on pre-qualification means genedrive's product joins a list of devices eligible for purchase by United Nations procurement agencies. WHO member states are encouraged to buy from the list.
The genedrive HCV-ID kit is a portable molecular testing kit for hepatitis-C that delivers results in 90 minutes from a small plasma sample. This allows healthcare workers to operate in the field rather than hospitals.
In a statement, Genedrive chief executive David Budd called the WHO prequalification an “important milestone”. The technology was scientifically and independently tested before receiving sign-off.
“The process itself was very rigorous and we are pleased to have our HCV products validated through their independent audit and laboratory testing processes,” Budd added.
“WHO PQ will support the commercial processes of our distribution partners in many countries and evidences genedrive's product development and vigilance processes to this important agency."
Plans to raise £8mln
Then, in a separate announcement on Tuesday, the company confirmed it had raised £7mln through the placing of 8.75mln new ordinary shares - representing around 20% of its enlarged share capital - with new and existing institutional investors at a price of 80p each, a 60% discount to its closing price on Monday.
genedrive said it also it plans to raise a further £1mln by way of a broker option through the issue of up to 1.25mln new shares to enable smaller shareholders and other retail and institutional investors to participate in the fundraising. The broker option will be open until 5.00pm, on May 11, 2020, it added.
The group noted that Dr Ian Gilham, David Budd, Matthew Fowler, respectively, the company's chairman, chief executive officer and chief financial officer, have indicated an intention to place an order for shares through the broker option to the aggregate value of £40,000.
The firm said the proceeds will support the rapid development of its coronavirus tests, as well as funding scale-up of inventory for an initial period, product development and commercialisation as well as general working capital.
Shares in genedrive closed at 220p on Tuesday having rocketed 26% higher to 299p in opening deals.
-- Adds fundraising completion details, closing share price --