Arovella Therapeutics Ltd (ASX:ALA) has received firm commitments from institutional and sophisticated investors to raise $4.57 million.
The company, which is focused on developing its invariant Natural Killer T (iNKT) cell therapy platform, will release 120,230,220 new fully paid ordinary shares at $0.038 apiece, set at a 2.5% discount to the last traded market price.
There was strong support for the placement from institutional and sophisticated investors, including cornerstone participation by specialist life sciences institutional investor, Merchant who have subscribed for $3 million of the placement.
The placement will be followed by a share purchase plan (SPP) to raise roughly $1.5 million from eligible existing shareholders at the same offer price as the placement.
The money will be used to develop ALA’s iNKT cell therapy platform and DKK1-peptide targeting monoclonal antibody, recently licensed from the world-renowned MD Anderson Cancer Center.
“A significant step forward”
“This capital raising is a significant step towards bringing Arovella’s highly prospective cell therapy pipeline to the clinic and, ultimately, to market. This is a testament to the hard work of Michael and the team in recent years,” Arovella managing director and CEO Michael Baker said.
“We are excited to receive strong support from Merchant and other long-term supporters in this capital raising, and we look forward to delivering value to all of our shareholders.
“The funds from the placement and SPP will allow us to progress our pipeline of innovative cancer cell therapies, which we look forward to progressing through pre-clinical and clinical trials, towards commercialisation.”
Raise details
Placement
Under the terms of the placement, ALA will issue 120,230,220 new shares to placement subscribers, raising $4.57 million at $0.038 per share.
This pricing represents a 2.5% discount to the last close on January 19, 2022 of $0.039.
Arovella directors will contribute up to $160,000 on the same terms as the placement, subject to the approval of shareholders.
Shares are expected to be allotted on February 1.
SPP
ALA will also offer a SPP to existing eligible shareholders at the same price as the placement.
The SPP is underwritten up to $1.5 million by Baker Young Limited, with a sub underwriting commitment by Merchant up to $750,000 of the SPP.
Under the SPP, eligible shareholders listed on the Arovella register on Friday, January 21, 2022, can apply for up to $30,000 worth of fully paid ALA shares without incurring brokerage fees or other transactions costs, irrespective of their holding size.
ALA reserves the right to raise more or less than $1.5 million in its absolute discretion.
The closing date for the SPP is March 9, 2022, with shares to be issued on 16 March.
About Arovella
Arovella is focused on developing therapies to treat human disease and has two focus areas: oncology and conditions that impact the central nervous system.
ALA is developing its iNKT cell therapy platform from Imperial College London to treat blood cancers and is also developing low-risk oral sprays to reformulate existing pharmaceuticals.
The potential benefits of administering drugs through the oral mucosa (i.e. cheeks, tongue, gums and palate) include ease of use, lower dosage, reduced side effects and faster response time.
Arovella’s product pipeline includes an oral spray for the platelet lowering drug anagrelide to treat metastatic disease in the background of high platelets, and ZolpiMist™, a first-in-class oral spray of zolpidem tartrate to treat short-term insomnia.
ZolpiMist is approved by the Food and Drug Administration (FDA), the Therapeutic Goods Administration (TGA) and the Ministry of Health (Chile) and is marketed in the US.
Arovella has rights to the product outside of the US and Canada.
Other products in development include oral sprays to treat migraine headaches, motion sickness, and drug-resistant epilepsy.