Phylogica plummets on $10m raising

Subiaco-based biotech firm Phylogica has announced plans for a heavily discounted $10 million capital raising to fund development of its cancer treatment programs.

The raising will be made by way of a one-for-one entitlement issue at 1 cent per share, representing a 56.5 per cent discount to Phylogica’s last closing price.

Shares in Phylogica plummeted on the news, down 34.7 per cent to 1.5 cents at 10:20am.

“This funding gives us the scope to advance our drug candidates towards more license deals and commercialisation,” chief executive Richard Hopkins said.

“Our technology can be complex and it is heartening that those who know us best are committing the bulk of the new funds.”

Commitments for the raising have been received mostly from the company’s existing major shareholders.

The funds will be used to advance Phylogica’s cancer programs towards the clinical development stage, and for working capital.

Phylogica also plans to continue screening its library of novel compounds with the hope of developing other new drugs.

The issue was managed and fully underwritten by Patersons Securities.