E-Therapeutics (LON:ETX) revealed today it is raising £17.6 million from investors that will provide the company with funds to develop four lead drug candidates while pursuing collaborative deals.
A small portion of the funds will also be used to repay £900,000 of loan notes.
The placing will allow a number of selling shareholders to sell around £3.4 million-worth of stock.
A total of 67.7 million new shares are being issued at a price of 26 pence each – a 2 per cent premium to last night’s close.
The cash call will see the investment firm Invesco become the biggest investor in e-Therapeutics with a stake of 47.7 per cent. It has received a waiver from the authorities meaning it doesn’t have to launch a mandatory bid for the firm.
Professor Malcolm Young, chief executive, said:"Our leadership in network pharmacology has enabled us to build an efficient drug discovery platform designed to discover effective and safe drug candidates in disease areas where there remains pressing unmet clinical need. This platform has now generated a development portfolio with multiple mid-stage drug candidates, whose value is now becoming evident.
"The response to this fundraising and the additional secondary appetite for shares in the Company reflect growing recognition of the considerable potential value being created in both the portfolio and the platform through the application of e-Therapeutics' proprietary techniques to major drug discovery and development problems.
E-Therapeutics will receive £16.6 million after fees and expenses, giving it around £17.5 million of cash in the bank after the loan note repayment.
The company specialises in an area of drug research called network pharmacology. This cutting edge science has the potential to evaluate new compounds for efficacy and safety, which ought to ensure fewer drugs fail in clinical trials.
But even more impressive is the ability to find completely new medical uses for products already out on the market, and to derive medicines for diseases that are currently poorly treated or not treatable at all.
Using its screening technique e-Therapeutics has identified and repurposed drugs for asthma, cancer, depression, atherosclerosis and C.difficile.
It is taking a twin track approach. The asthma and depression compounds are going into phase III trials in India, with the help of pharmaceutical partner Khandelwal Laboratories.
At the same time the drug candidates will enter the clinic here in the West.
It is hoped the data from India will provide some good evidence that the drugs work, but the main thrust of the research will be the multiple phase II trials.
Infinitus Clinical Research will run the trials, recruiting 150 patients initially though there is the capacity to extend this to 500.
In a recent interview finance director Johnny Cordiner said the first pieces of clinical data “will show us whether we are on the right track”.
If positive, it also allows the senior management to sit down the industry’s big players and talk about potentially money-spinning drug collaborations agreements.