Arovella Therapeutics Ltd (ASX:ALA) has attracted an increase in valuation from Edison Group, with the recent capital raise extending the runway to end-FY23.
The company’s total valuation has been increased to A$30.5 million or A$0.05 per basic share from A$25 million reflecting higher cash levels due to the recent capital raising activity.
However, the per-share impact has been minimal due to the additional shares issued as part of the fundraising.
ALA shares yesterday traded up to A$0.043 with a market cap of approximately A$28.84 million.
Following are the excerpts from the Edison Group’s report:
Capital raise extends runway to end-FY23
Arovella raised A$6.7 million through two rounds of financing in Q1 CY22. The first round of financing raised A$4.6 million through institutional investors and the second round raised A$2.2 million through a share purchase plan.
The company intends to utilise the funds for the development of iNKT cell therapy as well as for potential acquisitions of new technologies in the field of oncology.
Consolidating iNKT franchise
Arovella has selected a plasmid and vector manufacturer for its lead program, ALA-101 (CAR19-iNKT), and the production process for the lentiviral vector commenced in January.
Post vector production, the company will start the manufacturing of iNKT cells (a contract manufacturer is expected to be finalised in Q1 CY22).
In the case of ZolpiMist, partner Teva received early approval from Chile’s Ministry of Health in October.
Arovella’s Australian-market partner STADA is expected to generate initial Zolpimist sales in Q3 CY22 and Arovella will be entitled to royalties.
Valuation: A$30.5 million or A$0.05 per basic share.
We have increased our valuation for Arovella to A$30.5 million or A$0.05 per basic share, from A$25 million or A$0.05 per basic share, mainly reflecting higher cash levels from recent capital raising activity.
We believe its current pro forma net cash position (A$11 million) extends the runway to CY23.
We are not yet including either of the CAR-iNKT programs in our valuation but intend to do so when they enter the clinic.
Given the sales of similar products and/or the possibility of an acquisition, the resulting changes to our valuation could be meaningful.