Oncimmune Holdings Plc (LON:ONC) has raised £9mln to support the growth of its ImmunoINSIGHTS business, in Dortmund, which is in-demand and has a growing pipeline of commercial prospects.
ImmunoINSIGHTS, acquired by Oncimmune in 2019, has so far entered into seven contracts with leading global biopharmaceutical companies including Roche and Genentech and is currently in advanced talks for 19 further potential contracts.
The contracts currently under discussion would have a value of around £10.8mln, and these are among a pipeline that presently has more than 100 separate opportunities, the company noted.
Oncimmune highlighted that ImmunoINSIGHTS is in a position to deliver sustainable growth.
It intends to use proceeds from the equity raise to invest in ImmunoINSIGHTS, to take advantage of its growing pipeline.
Cash will be used to increase the operating capacity which will accommodate the near-term contracts and others in the pipeline.
Presently the business, which fulfils service contracts as part of the development of immune checkpoint inhibitors and other biotechs, has the capacity to handle some 10,000 samples per year – and the company currently sees utilisation of around 60%.
The plan is to expand capacity in Dortmund to 20,000 samples per year by December 2021 and then 40,000 samples per year by June 2022.
In step, it intends to bolster the sales and business development presence for ImmunoINSIGHTS in the United States.
At the same time, the company said it plans to “rationalise certain of its partnerships to enable strategic optionality” and support a path to US capital markets, eyeing a dual listing.
Some proceeds will, meanwhile, also be invested in Oncimmune’s commercial discovery technology.
Adam Hill, Oncimmune's chief executive, said: " Whilst Oncimmune is already funded to meet previous market expectations, it has become clear that an exciting opportunity exists to deploy additional capital to accelerate the growth of the ImmunoINSIGHTS business in the near term.
"We are therefore delighted with the outcome of this oversubscribed equity financing round and the strong level of support received from both existing and new investors.
"The company is increasingly being recognised as a global leader in the stratification of patients to optimise immune-modulating therapy, helping our partners to develop new classes of medicines to treat patients with cancer, autoimmune disease and, more latterly, infectious diseases.
"This funding will accelerate an exciting growth trajectory for the company as we scale up our capacity to deliver a growing number of ImmunoINSIGHTS services projects."
Trading update
Onciummue highlighted progress in-line with commentary at the time of its latest results, released February 15.
It noted that within ImmunoINSIGHTS it continues to expect the signing of new contracts before the end of this financial year.
The EarlyCDT Lung product business is, meanwhile, said to be proceeding well and the company noted that a significant number of blood tests have been performed. Participants that have tested with a positive result for the presence of lung cancer being referred for further clinical examination.
The company expects the signing of another NHS contract before the end of the financial year, as previously announced.
Elsewhere, the company's partner in the US, Biodesix Inc has reported a continued increase in onboarding of new sales representatives dedicated to EarlyCDT Lung to US pulmonologists and it is forecasting an acceleration in quarter-on-quarter sales growth through calendar year 2021.
“Overall, the company continues to deliver on its strategic objectives and is benefiting from the creation of a business which now has a broad commercial offering with significant revenue growth potential,” Oncimmune said in the statement.
“It is against this backdrop of momentum that the Board is confident of delivering increasing value to all stakeholders.”
--adds placing outcome, comment --