TISSUE THERAPIES AIMING TO RAISE $7.7M
Written on the 4 February 2015 by Antony Scholefield
BRISBANE-BASED biomedical technology company Tissue Therapies (ASX: TIS) has raised about $4 million from a placement to institutional investors and plans to raise another $3.7 million with a new offer to shareholders.
The placement to institutional and sophisticated investors was pitched at 21c a share, a 36.5 per cent discount to the company's weighted-average closing price between January 20 and January 30.
From February 11, Tissue Therapies will offer an extra 17.5 million ordinary shares to existing shareholders at the rate of one new share for every 15 held on February 10. These shares are also being offered at 21c each.
Under the entitlement offer, buyers will be unable to renounce the new shares and unable to trade them until they are acknowledged by the ASX on March 10.
The offer is fully underwritten by Morgans Corporate Ltd and Baillieu Holst Ltd.
Tissue Therapies CEO Steven Mercer says the company is raising capital because approval processes for the CE Mark, a mandatory conformity mark for certain products sold in the European Economic Area, has "exceeded the internal timelines and expectations".
The European Medicines Agency review committee recently delayed the date for its report on Tissue Therapies' new drug from February 26 to March 26.
The fresh capital will support efforts to separate the CE Mark approval process from the Food and Drug Administration (FDA) approval process in the US.
"It has become apparent that the appropriate risk mitigation strategy is to uncouple FDA approvals and sales for a diabetic ulcer trial in the rest of the world from the EU (European Union) CE Mark process," says Mercer.
"The capital raising will support this objective. The entitlement offer will provide eligible existing shareholders with the opportunity to participate in the capital raising at the same price as the sophisticated and institutional investors who participated in the placement."
The capital will also help to "meet the operational costs of the company" and prepare for human trials on the diabetic ulcer treatment in the second half of 2015.
Tissue Therapies shares started the year at 31c but have underperformed over the last month, falling by 7.6 per cent even as the ASX 200 rose by 5.8 per cent.
They last traded at 26c.
Author: Antony Scholefield