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4D Pharma raising at least ?18m via placing and subscription
18th Feb 2020 09:26
(Sharecast News) - Live biotherapeutic pharmaceutical company 4D Pharma announced a proposed fundraising on Tuesday, by way of a placing and subscription of new ordinary shares and warrants, to raise gross proceeds of at least ?18m via an accelerated bookbuild process.
The AIM-traded firm said the placing and subscription would be achieved through the issue of at least 36 million new ordinary shares at a price of 50p each, with new and existing investors.
It said it had exercised its right to cause MSD to purchase $5m (?3.83m) of shares under the terms of a subscription agreement.
Participants in the placing and subscription would receive warrants, on the basis of one warrant for every two placing shares or subscription shares taken up by each participant.
The warrants would be exercisable for five years from the date of admission, and had an exercise price of 100p per Ordinary Share.
4D Pharma said it would not be making an application for the warrants to be admitted to trading on AIM.
The net proceeds of the fundraising, together with the company's existing resources, were expected to support its ongoing clinical studies in irritable bowel syndrome (IBS) and oncology, and to enable the company to continue to fund its operations to at least two clinical study readouts, as well as for general corporate purposes.
Subject to reporting positive data from these studies, 4D said it believed those would provide a material validation for its approach to developing live biotherapeutics, and also serve as value-accretive events for shareholders.
The company's longer-term development, regulatory and commercial strategy for its portfolio of live biotherapeutics would be informed by those data readouts, with the group's further funding needs and partnering strategy to be addressed in that context.
"4D Pharma is pleased to launch this funding round - its first since 2015 and in challenging market conditions for developers of new therapeutics - with strong support from existing and new investors, including our partner MSD and other US investors in addition to those in the UK," said chief executive officer Duncan Peyton.
"This funding will enable us to reach important milestone data points in two clinical studies which we believe will represent material value inflection points as positive data, if generated, will provide strong further validation of our approach to developing live biotherapeutics."
At 1521 GMT, shares in 4D Pharma were down 11.37% at 61.38p.
The AIM-traded firm said the placing and subscription would be achieved through the issue of at least 36 million new ordinary shares at a price of 50p each, with new and existing investors.
It said it had exercised its right to cause MSD to purchase $5m (?3.83m) of shares under the terms of a subscription agreement.
Participants in the placing and subscription would receive warrants, on the basis of one warrant for every two placing shares or subscription shares taken up by each participant.
The warrants would be exercisable for five years from the date of admission, and had an exercise price of 100p per Ordinary Share.
4D Pharma said it would not be making an application for the warrants to be admitted to trading on AIM.
The net proceeds of the fundraising, together with the company's existing resources, were expected to support its ongoing clinical studies in irritable bowel syndrome (IBS) and oncology, and to enable the company to continue to fund its operations to at least two clinical study readouts, as well as for general corporate purposes.
Subject to reporting positive data from these studies, 4D said it believed those would provide a material validation for its approach to developing live biotherapeutics, and also serve as value-accretive events for shareholders.
The company's longer-term development, regulatory and commercial strategy for its portfolio of live biotherapeutics would be informed by those data readouts, with the group's further funding needs and partnering strategy to be addressed in that context.
"4D Pharma is pleased to launch this funding round - its first since 2015 and in challenging market conditions for developers of new therapeutics - with strong support from existing and new investors, including our partner MSD and other US investors in addition to those in the UK," said chief executive officer Duncan Peyton.
"This funding will enable us to reach important milestone data points in two clinical studies which we believe will represent material value inflection points as positive data, if generated, will provide strong further validation of our approach to developing live biotherapeutics."
At 1521 GMT, shares in 4D Pharma were down 11.37% at 61.38p.