Race has received firm commitments for A$1.8 million (before costs) in new equity funding via a strategic placement of six million ordinary shares, at an issue price of $0.30 per share.
The placement has been anchored by biotechnology-focused institutional investor Merchant Opportunities Fund, which has a number of long-term strategic investments in the Australian biotechnology industry, including a cornerstone early stage investment in PolyNovo Limited (ASX: PNV).
Merchant acquired a strategic 15 per cent stake in PNV in 2012 and has continued to support its rapid growth to a multi-billion dollar company. Merchant also holds a significant long-term investment in the medical diagnostics company Rhythm Biosciences (ASX: RHY) supporting the development of their simple blood colon cancer screening test.
“To have attracted such strong support from a successful biotech institutional investor with a proven track record of picking promising early stage life sciences companies is a significant validation of Race’s plans and future potential,” said Race CEO Peter Molloy.
“We thank Merchant for their support and are now funded to progress our ‘5-path’ clinical strategy for Bisantrene. We look forward to reporting progress on our clinical trials and related activities in the months ahead.”
The issue price represents a 9 per cent discount to the last closing price and a 9.5 per cent discount to the 20-trading day volume weighted average price.
The placement will provide Race with sufficient resources to advance the Company’s ‘5-path’ clinical development strategy for Bisantrene through 2020. initiatives associated with its clinical plan are currently underway and the Company looks forward to updating shareholders in the near-term.
Race appoints Non-Executive Chairman
In other news, Race also welcomes the appointment of Dr John Cullity to the role of Non-Executive Chairman succeeding founding Chairman Dr Bill Garner, who will transition to a Non-Executive Director role.
Dr Cullity has been a Non-Executive Director of Race Oncology since April 2018. Dr Cullity is an Australian haematology-oncologist with considerable pharmaceutical industry experience, including as Director of Health Economics and Strategic Pricing at Schering-Plough, and seven years at Sanofi-Aventis leading their Oncology Pricing and Business Development program.
Dr Cullity has an impressive background in investment banking. Between 2010 and 2017, he was a principal at the leading life science advisory and investment firm, Torreya Partners in New York.
During his investment banking career, he been involved in over 100 licensing and M&A transactions in the life sciences arena, with a combined value in excess of US$10 billion, including the licensing of Antisoma’s oral oncology drug fludarabine by Sanofi, and Kineta’s oncology RIG-I inhibitor by Pfizer.
Race Oncology is confident that Dr Cullity’s clinical background, along with his extensive pharmaceutical deal experience and high level industry contacts, will allow us to progress our ‘5-Path’ clinical strategy for Bisantrene and achieve our stated goal of securing significant licensing agreements with leading pharmaceutical partners.
“I continue to be as committed as ever to Race, particularly as it enters such an exciting phase in the Company’s history as we execute on the new 5-Path strategy to bring Bisantrene back into clinical practise,” said Dr Bill Garner.
“John will be an outstanding Chairman and he has made a significant contribution to the Company in his time as a Non-Executive Director. He has tremendous corporate transaction experience and a deep understanding of oncology. These are the key attributes that we need in a Chairman as Race moves into the clinic. I look forward to continuing to work closely with our management team and board as we unlock additional value for all our shareholders.”
Incoming Non-Executive Chairman Dr John Cullity said he was pleased to be assuming the Chairman’s role with Race Oncology as the company entered a critical phase.
“I would like to take this opportunity to thank Bill for his guidance and leadership. We are grateful for his outstanding service as a Chairman and we admire his decision to put the company first,” said Dr Cullity.
“Race has a compelling opportunity and is exceptionally well positioned to capitalise on a well thought out strategy. I look forward to leveraging my experience and international network to assist the company in what is a very exciting time.”
More details about the $1.8m strategic placement
Shares under the placement are expected to be allotted and issued by Friday, 13 March 2020, and will rank equally with the existing ordinary shares on issue. The new shares will be issued in accordance with the Company’s existing placement capacity under ASX listing rule 7.1. Nascent Capital Partners will be issued 1,500,000 options, exercisable at $0.45 each and expiring 24 months from the date of issue under the terms of Race’s existing capital raising mandate.