Patrys Ltd (ASX:PAB) intends to raise A$7.8 million via a A$2.5 million placement to institutional investor Territory Funds Management and a fully underwritten, A$5.3 million non-renounceable rights issue to eligible shareholders.
The issue price of A$0.035 per share is a 17.8% discount to the 10-day volume weighted average price (VWAP) to October 27, 2021, of A$0.0426.
Placement shares are expected to be issued on or around Monday, November 8, 2021, while the entitlement offer document is expected to be available and lodged with ASX on November 9, 2021, and will close on November 29.
Patrys is a therapeutic antibody development company focused on the development of its deoxymab platform of cell-penetrating antibodies as therapies for a range of different cancers.
While most antibodies bind to cell surface markers, deoxymab penetrates the cell nuclei and binds directly to DNA where it inhibits DNA repair processes. The company is developing its PAT-DX1 treatment, as well as full-sized IgG (Immunoglobulins) deoxymab antibody, PAT-DX3.
The funds will be used to strengthen PAB’s balance sheet and feed into operational developments including:
- Initiation of a formal development program for PAT-DX3, Patrys’ full-sized IgG deoxymab antibody, that is expected to provide Patrys with additional development and partnering opportunities;
- Development of a manufacturing process to provide clinical-grade PAT-DX3 at commercial scale including establishing a stable, high-yielding producer cell line;
- Further R&D studies including use of deoxymabs for targeted delivery to support potential inhouse and partnered programs for antibody drug conjugates (ADCs); and
- Expansion of the company’s business development activities, working capital, corporate activities and offer costs.
Adding second deoxymab asset
“This capital raising will enable Patrys to formally add a second deoxymab asset to its development pipeline,” Patrys chief executive officer and managing director, Dr James Campbell, said.
“Based on the promising data we have seen for PAT-DX3 since we announced it 12 months ago, we believe there are a range of very attractive potential applications for this deoxymab that will significantly expand opportunities for internal development and partnering which we believe have the potential to generate significant shareholder value.
“Our lead asset PAT-DX1 remains on track to commence the final preclinical toxicology studies in H1 2022, which will support the initiation of a Phase 1 clinical trial in late 2022. While the costs of PAT-DX1 program are covered by our existing financial capacity, there was no capacity to support the additional activities required to meaningfully progress PAT-DX3.
“We are delighted that existing shareholder Territory Funds Management has supported the company so strongly in this raise and we are equally delighted at this pivotal time in the company’s development to be able to provide the opportunity to existing shareholders to invest in this exciting expansion program for Patrys via the fully underwritten 1:12 rights issue.”
Are partnering opportunities on the cards?
In September 2020, Patrys completed initial production and characterisation of a full sized, IgG deoxymab antibody called PAT-DX3.
Since then, Patrys has demonstrated in various animal models that PAT-DX3 has a different pharmacokinetic profile to its lead asset PAT-DX1, is able to cross the blood brain barrier, and can potentially act as a targeting agent for antibody drug conjugates.
Given the differences, PAT-DX3 is likely to open up additional opportunities for Patrys’ deoxymabs platform as its larger size makes it more suitable for attaching payloads.
Data from the recent proof-of-concept study showed the potential for using deoxymabs as targeting agents.
The data demonstrates that its’ full-sized deoxymab antibody, PAT-DX3, increases survival in an animal model of breast cancer.
Read: Patrys' deoxymab conjugate increases breast cancer survival rate in animal model
“We believe this is likely to be of significant interest to potential partners for a range of applications, as well as providing internal development opportunities for Patrys,” Territory Funds Management chief investment officer Gareth Jakeman said.
“Having a manufacturing process in place or under development will put the company in a strong position for securing partnering opportunities and assist with negotiating more attractive commercial terms.
“Patrys is continuing to make excellent progress with progressing its lead asset, the deoxymab antibody fragment PAT-DX1, into clinical development.
"Following a manufacturing delay due to COVID-19 pandemic related supply chain disruptions (August 3, 2021), Patrys is expecting to complete the first full-scale manufacturing run of clinical-grade PAT-DX1 before year end, allowing the preclinical toxicology studies required for the Phase 1 clinical trial to commence in early 2022.
“We believe that this is a key inflection point in Patrys’ evolution. This capital raise provides the company with the ability to take advantage of the opportunities provided by PAT-DX3, and to properly resource the growing business development activities that are expected to emerge from the expanded portfolio.
“The ability of deoxymabs to act as a delivery mechanism for other therapeutics as well as their potential to provide a pan-cancer treatment platform is expected to generate a number of unique product development opportunities for Patrys and potential partners.
“While its deoxymabs are still a year away from the clinic, these assets are very licensable and compare favourably to the valuations we see in public and private market companies at a similar stage.”