Actinogen Medical (ASX: ACW) has received a double-shot of positive news earlier today after the biotech company received the all-clear from the Data Safety and Monitoring Board (DSMB) to continue its landmark phase 2 XanADu study, in addition to welcoming a new cornerstone investor onto its shareholder register, as part of a $15 million capital injection from a US-based biotech investment fund.
Its flurry of good news saw its shares rise as high as $0.052 per share before the afternoon, up around 15% on the day before falling back to $0.048 by mid-afternoon trade.
XanADu is a randomized, double-blind, multi-centre clinical study comparing Xanamem to placebo in patients with mild dementia due to Alzheimer’s disease.
The DSMB recommended that Actinogen continue its study “without modification” following analysis of a total of 87 patients included in the study and confirmed the positive benefit-risk safety profile of Xanamem.
Xanamem is Actinogen’s drug candidate intended to fight Alzheimer’s disease, by blocking the excess production of a known stress hormone called cortisol, through the inhibition of the 11β-HSD1 enzyme in the brain.
Actinogen continues to enrol patients into the XanADu clinical trial and says it currently has a total of 100 patients, around 57% of its ultimate enrolment goal of 174 patients.
The DSMB also said that no treatment-related serious adverse events have been reported with the regulator supporting the development of Xanamem in other potential indications such as diabetes-associated cognitive impairment.
Actinogen said that its XanADu study is “on track and in line” with management’s projections, with the last patient expected to be enrolled by the end of Q4 this year.
“If Xanamem is shown to safely and effectively treat dementia due to Alzheimer’s disease, it would represent a significant breakthrough in the management of this devastating disease. We eagerly await the completion of the XanADu enrolment before the end of 2018 and the review of the full dataset in Q2 2019,” said Dr Bill Ketelbey, CEO of Actinogen Medical.
Cornerstone funding secured
In addition to previously saying that its XanADu study was “fully funded”, Actinogen has secured further capital investment via a placement to new investors.
Actinogen said the placement received “strong interest” from institutional investors with specialist US-based biotech investment fund Biotechnology Value Fund (BVF) agreeing to invest A$10.5 million alongside other leading Australian institutional investors Platinum Investment Management and Australian Ethical Investment.
The deal means BVF is on course to become Actinogen’s largest shareholder with a 19.9% stake – a “high risk” move that could provide handsome rewards for BVF over the coming years, according to BVF.
“While any investment in a disease as prevalent and debilitating as Alzheimer’s disease is high risk, we believe that Xanamem, if successful, offers the extraordinary promise of improving the lives of millions of people worldwide. Our investment in Actinogen follows on from a number of rewarding investments in Australia over the past decade and we feel privileged to play a significant role in supporting the company,” said Mark Lampert, founder and general partner of Biotechnology Value Fund.
Actinogen said it would be issuing a total of 300 million new shares in two tranches.
The first tranche of 184 million shares would be issued to BVF at $0.05 per share for a value of around $9.4 million – a 13.4% premium to Actinogen’s 5-day value weighted average price.
The issuance of the remaining 112 million shares worth around $5.6 million is still subject to shareholder approval but is expected to be a formality at the company’s next shareholder meeting.
Not forgetting current shareholders
Actinogen has also announced it is offering a share purchase plan to reward loyal shareholders, to raise a further A$2 million, which brings its total capital raising this week to A$17 million.
The offer is only available to Actinogen shareholders who held shares prior to May 22nd, 2018. The share purchase plan will be offered at the same price as the placement to the US biotech fund to not disadvantage current investors, with eligible shareholders being given the opportunity to acquire up to $15,000 of new ordinary shares.
According to Actinogen, the entirety of the newly raised capital will be deployed towards advancing the company’s existing development plan including a study exploring a higher dose of Xanamem in Alzheimer’s disease and studies conducted in alternative clinical indications.
Expansion of the development plan for Xanamem into these new indications is likely to enhance its growing data set and ultimately make its Xanamem drug more commercially viable.
“We are delighted to welcome BVF as a major institutional investor in Actinogen and our largest shareholder. The contribution this investment will make to the consolidation of Actinogen’s exciting development pipeline is significant, and it represents a further positive endorsement of our progress made to date with Xanamem. It is important that the Company continues to expand the potential clinical applications of Xanamem while rapidly advancing our existing Alzheimer’s disease development plan. The BVF investment will underpin both these important arms of the Company’s strategy,” said Dr Ketelbey.