AdAlta Ltd (ASX:1AD) is seeking an early return to clinical trials of its lead asset, AD-214, with a $3.5 million non-renounceable rights offer.
The Melbourne-based drug developer will offer eligible shareholders in Australia and New Zealand two new shares — at 2.5 cents each — for every five shares already held. The two new shares will also come with an option to purchase an additional share at 3 cents until May 29, 2024.
In an announcement to the ASX this morning, AdAlta said the offer builds on “significant progress” made towards meeting key milestones by allowing for an early return to studies of AD-214 under an extended Phase 1 program.
“We are pleased with the growing partner interest in AD-214 as exemplified by more companies executing confidentiality agreements and asking deeper and more sophisticated questions,” AdAlta chief executive and managing director Dr Tim Oldham said.
“We are delighted to announce that we will bring AD-214 back to the clinic early. We will be making use of existing drug product inventory to cost effectively generate new data to build additional value and support potential partnerships.”
The multidose Phase 1 extension study will look to demonstrate the safety of AD-214 at higher doses, thereby reducing dose escalation requirements in Phase 2. A portion of the proceeds raised will also support partnering discussions and other opportunities to expand AdAlta’s product pipeline.
Commitments received for $2.49 million
AdAlta has already received commitments from investors for $2.49 million of the target amount.
Both Dr Oldham and non-executive director David Fuller intend to take up their entitlement in full, while major shareholder Platinum Investment Management has agreed to do the same.
In addition, AdAlta’s corporate advisor for the offer, Peak Asset Management, has committed to subscribe for $1.5 million of any excess shortfall.
If fully subscribed, just over 126 million new shares will be issued, along with 63 million new options to investors and a further 15 million new options to Peak Asset Management.
“We are grateful of the depth of support that major shareholders have shown for AdAlta in the lead up to the offer and are pleased to launch the offer with a strong level of funding committed,” AdAlta chairman Dr Paul MacLeman said.
“This funding will enable AdAlta to return AD-214 to the clinic swiftly to help progress the company towards transactions and transformational new therapies for fibrosis and cancer patients.”
The offer will open on May 5 before closing on May 22.