Medical dermatology company Botanix Pharmaceuticals (ASX: BOT) has raised A$8 million through an oversubscribed placement to professional, institutional and sophisticated investors across Australia and Asia.
The raising comes at a critical juncture in the company’s development as it looks to conduct a series of highly anticipated clinical trials commencing next month.
Botanix said that the funds generated will be used to “rapidly advance” BTX 1204 into a phase 2 clinical trial. The phase 2 trial is expected to cost around A$6 million and if successful, would progress its cannabidiol-based BTX 1204 transdermal gel that aims to treat atopic dermatitis.
According to medical professionals, there is currently no effective treatment for atopic dermatitis and Botanix claims its BTX 1204 product represents a viable avenue with strong potential, having conducted a phase 1b study earlier year.
BTX 1204 uses cannabidiol as its prime ingredient which can potentially be effective in treating atopic dermatitis and severe conditions such as eczema.
The remaining A$2 million will be utilised to develop BTX 1801 via a pilot clinical study and phase 1b study. Its series of upcoming trials means Botanix remains on track to announce the BTX 1801 product in the near term.
Regarding its BTX 1503 product, Botanix received Australian ethics approval for its phase 2 clinical trial earlier this month. This approval closely follows recent Investigational New Drug (IND) approval by the US Food and Drug Administration (FDA) for the US portion of the phase 2 trial.
First patients are now set to be enrolled in June 2018 with the support of seven leading Australian dermatology sites, including the four sites that originally participated in the successful BTX 1503 phase 1b study.
The A$8 million placement included existing shareholders and resulted in the issue of 72.7 million shares at an offer price of A$0.110 each, reflecting an 8.3% discount to the last closing price of A$0.120 per share. Settlement is expected to occur on 26 June 2018, with new shares allotted the next day.
To provide clarity regarding its funding and working capital position, Botanix said that taking into account its existing cash reserves of around A$11.5 million, plus an anticipated R&D tax refund of A$4 million later this year and today’s A$8 million placement, the dermatology company is now “fully funded to complete two phase 2 clinical trials by mid-2019 and progress multiple pipeline products into phase 1b patient studies in the near term”.
The news saw Botanix’s shares fall back to $0.117 per share, down around 2.5% on the day.