MGC Pharma raises $10m to fast-track medical cannabis development
ASX listed MGC Pharma is well positioned to fast-track acquisitions and accelerate development of its cannabis-derived products after easily raising $10 million via a share placement at 6.5c per share.
In an update to the market on Friday, the Perth-based company said the placement was significantly oversubscribed from institutional and high net worth investors from Asia, Australia and North America, including the Merchant Opportunities Fund.
In the update, MGC said the monies raised would be used to enhance its growth objectives, including more research and development of its medical-grade cannabis derived products which are targeted at the booming Europe, US and Australian markets.
The equity raising will also be used to expand sales of MGC’s cannabis based cosmetics and dermatological product lines, company management said. MGC has already achieved European and US revenue flows from its cosmetic offering and is advancing the commercialization of its derma line via human clinical trials in Slovenia.
MGC co-founder and Managing Director Nativ Segev said: “To receive commitments well in excess of $10m is a substantial validation of, not only our company, but also of the enormous potential of medical cannabis globally.
“These funds will allow us to fast-track the research, development and commercialisation of our own pharmaceutical-grade products which could potentially treat a variety of indications.”
After Friday’s placement, MGC now has more than $13.5 million cash in the bank and looks well positioned for a significant growth phase in calendar year 2017.
The company is also poised to cash in on the Australian federal Government’s recent easing of laws regulating medicinal cannabis for authorised cannabis importers to Australia.
MGC is somewhat unique in the growing global cannabis market.
The company is pursuing both a research program into medicinal cannabis alongside its cosmetic and dermatological product line development with the latter providing funding for the former.
MGC Pharma’s shares finished up last week at 7.9c a share representing a windfall profit of 21.5% for those lucky enough to have picked up stock in the 6.5c placement.
MGC Pharmaceuticals (MXC)
Closing price for the last 90 trading days
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