Paradigm Biopharmaceuticals Ltd (ASX:PAR) is set to raise $66 million in a fully underwritten placement that post-raise will give it a proforma cash position of $108.5 million to fund it into CY2024.
The rise will comprise a A$45.7 million institutional placement and a one-for-15 pro-rata non renounceable entitlement offer of A$20.3 million at $1.30 per share.
The placement received strong participation from domestic and offshore institutional investors and once completed, a global long only institutional investor will become a substantial shareholder.
Use of funds
Funds raised by the late-stage drug development company will be used towards:
- Paradigm’s Phase 3 clinical program and new drug application (NDA) related activities;
- business development-related activities;
- product development-related activities (auto injector, for example); and
- working capital.
Paradigm chairman Paul Rennie said of the raise, “I would like to thank all institutional investors who participated in the placement, and I am delighted that all Paradigm shareholders now have the right to also invest under the fully underwritten non-renounceable entitlement offer.
“Personally, I will be subscribing for $300,000 of new Paradigm stock under the entitlement offer. Having a strong balance sheet is important to Paradigm so we can maintain or accelerate the momentum of our Phase 3 clinical trial. A strong balance sheet is important as we have commercial discussions in the future."
Work in progress
Paradigm is looking forward to the upcoming release in September of the first of three readouts for its PARA_OA_008 synovial fluid biomarker study.
Day 56 data (recorded two weeks following final injection) will be released detailing initial trends of synovial fluid biomarkers between patients treated with the company's pentosan polysulfate sodium (PPS) asset and those treated with a placebo.
The readout is also expected to detail WOMAC® pain and function data for the twice-weekly PPS group and the once-weekly PPS group compared with placebo.
The company is also in active partnering discussion with potential partners for Its Phase 2 asset in MPS which could further expand its funding position.
About the raise
The offer price for the placement and entitlement offer will be $1.30 per new share, representing a discount of:
- 34.5% to the last closing price on August 10, 2022 of $1.985 per share;
- 28.8% to the five-day VWAP of $1.827 per share; and
- 8.2% discount to the 30-day VWAP of $1.416 per share.
The record date for the entitlement offer is 7:00pm (Sydney time) on Thursday August 18, 2022.
This timetable is indicative only and subject to change.