Phylogica raises $3.75m for drug projects

Subiaco-based biopharmaceutical company Phylogica Ltd has launched a share placement and share purchase plan to raise a total of $3.75 million to help fund its drug discovery projects.

Company chief executive Stewart Washer said Phylogica's corporate advisors Cygnet Capital Pty Ltd would assist with the raising through a fully underwritten $1.5 million placement.

Cygnet executive director Darien Jagger said the funding would give the company a sound platform from which to launch its next growth phase.

In addition to the placement, all Phylogica shareholders will be offered a Share Purchase Plan to raise up to an additional $2.25 million, to be managed by Cygnet.

Under the SPP, shareholders registered as of 28 September 2006 (the record date) will be eligible to apply for up to $5,000 of ordinary shares, with the subscription price to be the lower of either:

• a 20 per cent discount to a 5-day weighted average market price prior to the closing date; or
• 45 cents per share.

The total to be raised under the SPP is capped at $2.25 million and all Phylogica shareholders are encouraged to respond as early as possible to ensure the best chances of securing their $5,000 allotment. The closing date for the SPP is set for 18 October 2006 and allotments will be made in order of receipt of applications until the amount to be raised is reached.

A conjunctional placement of $1.5 million to sophisticated, professional and institutional investment clients of Cygnet will also be completed with shares offered at the same price as the offer under the SPP. Subscribers to the placement will also receive one option of the listed class PYCO for every two shares issued.

"These raisings provide shareholders with comfort that sufficient funding has been secured to allow the Company to continue to grow aggressively as Phylogica delivers against significant milestones from its internal drug discovery projects and the key deals it has struck with companies such as Opsona and Johnson and Johnson Research. We are very excited about the next 12 months growth for Phylogica and look forward to significant value creation over this time" Dr Washer said.

The issue under the SPP is being made under exception 15 of Listing Rule 7.2 and other securities to be issued are less than the threshold set by Listing Rule 7.1, of 15 per cent of presently issued ordinary shares, so that approval of shareholders will not be sought prior to the allotment of shares.

Further details regarding the SPP will be sent to all shareholders after the record date.