Pharmaceutical company Race Oncology (ASX: RAC) has come out of a trading halt this morning to announce $1.8 million new equity funding via a strategic placement of 6 million shares.
The $0.30 per share issue price represents a 9% discount to the company’s last closing price and a 9.5% discount to the 20-trading day volume-weighted average price.
In a statement to the market, Race said the placement will provide the required resources to advance the company’s “five-path clinical development strategy” for Bisantrene over the course of this year.
According to Race, “several important initiatives” associated with its clinical plan are currently underway with updates expected in the near-term.
Race’s strategy has set out five distinct pathways for clinical development of Bisantrene, thereby expanding the addressable market for the drug while reducing clinical development risk and targeting cancers beyond acute myeloid leukaemia (AML).
The new strategy is seeking to harness the existing value held within Bisantrene due to its use in more than 40 prior human trials across a range of cancers.
Bisantrene was tested in more than 40 phase 2 clinical trials during the 1980s and 1990s before it was “lost” in a series of pharmaceutical mergers.
Before going off the development radar, Bisantrene demonstrated impressive activity in treating AML, to the point of being approved for the treatment of AML in France in 1988.
Given its prior development and use, Bisantrene has been proven to reduce cardiotoxicity compared to anthracyclines and to be effective against some cancers that have relapsed after the patients have already received high levels of anthracyclines.
According to Race, such results could potentially make it well-suited as a second or third-line treatment for patients that have reached their cardiotoxic limit of anthracyclines or whose cancer has become resistant to anthracycline treatment.
Boutique biotech-focused company Merchant Opportunities Fund corner-stoned the placement and will now add Race to its long-term strategic investments in the Australian biotechnology industry including an existing 15% stake in medical device maker PolyNovo (ASX: PNV).
Merchant also has a significant long-term investment in medical diagnostics company Rhythm Biosciences (ASX: RHY), a company that’s developing a 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. We thank Merchant for their support and are now funded to progress our ‘five-path’ clinical strategy for Bisantrene,” said Peter Molloy, chief executive officer of Race.
“We look forward to reporting progress on our clinical trials and related activities in the months ahead,” he added.
Appointment of non-executive chairman
In other news today, Race announced the appointment of Australian haematology-oncologist Dr John Cullity as non-executive chairman with founding chairman Dr Bill Garner, transitioning to a non-executive director role.
“Race 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 five-path clinical strategy for Bisantrene and achieve our stated goal of securing significant licencing agreements with leading pharmaceutical partners,” the company said.