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Australian drug development company Alchemia Limited (ASX: ACL) today announced it had raised $14.6 million through an institutional and sophisticated investor share placement and would commence a share purchase plan (SPP) to offer an additional $5 million to existing shareholders to fund the progression of its promising drug discovery programs.
Under the capital raising:
.. 13.3 million fully paid ordinary shares have been allocated and will be issued to institutions and sophisticated investors at $1.10 per share. The placement price represents a 14% discount to the 5-day volume weighted average market price of $1.28 up to and including 1 November 2005.
.. All existing Alchemia shareholders residing in Australia and New Zealand will be eligible to participate in the SPP. Under the plan, shareholders may purchase up to $5000 worth of additional Alchemia shares without brokerage or transaction costs at the placement price of $1.10 per share. Up to 4.55 million shares may be issued depending on the level of take-up from Alchemia shareholders.
Alchemia Managing Director Dr Tracie Ramsdale said the proceeds from the institutional placement and share purchase plan would enable Alchemia to accelerate its drug discovery program to the next stage of its development.
"A number of potential new drug opportunities discovered using our VAST™ drug discovery platform technology targeting cancer and eye diseases will be ready to move into clinical trials over the next 18 months," she said.
"Our aim is to increase the value of our drug discovery pipeline to a level comparable to our first product Synthetic Heparin."
Alchemia reaffirms it is firmly on track for the market launch of its Synthetic Heparin drug in 2008. The pilot scale synthesis of the first batch of Synthetic Heparin has been completed at Dow's facility in Midland. This material will now undergo purification and quality assurance testing prior to being released to the company's marketing partners, APP.
Following handover, APP will move to complete the two final elements of the product's development —obtaining regulatory approvals and coordinating the North American market launch.
In accelerating its drug discovery program, Alchemia will utilise the funds as follows:
.. Anti-cancer — Progressing anti-cancer drug candidate ACL16907 from its current preclinical status through to the completion of Phase II clinical trials in 2008.
.. Eye disease — Advancing a candidate to the end of Phase I clinical trials by 2007/08.
.. VAST™ drug discovery platform — The development of further lead compounds to a preclinical stage to provide additional compounds in a variety of therapeutic areas for early stage outlicensing over the next three years.
Dr Ramsdale said Alchemia's aim was to take anti-cancer drug ACL16907 into clinical trials potentially to the completion of Phase II, at which time the company would evaluate licensing opportunities.
"There are significant value increments for us as an outlicensing biotechnology company following completion of positive Phase I and II trials," she said.
"We aim to commence Phase I clinical trials by this time next year, which will require an Investigational New Drug filing with the US Food and Drug Administration in mid 2006."
Dr Ramsdale said the anti-cancer compound had demonstrated very encouraging preclinical results, with efficacy proven in animal models of human prostate cancer and non-small cell lung cancer.
'Subsequent results in animal models have shown a good therapeutic margin between efficacy and the maximum tolerated dose (MTD), highlighting ACL16907's suitability as a candidate for clinical trials."
Dr Ramsdale said Alchemia was also committed to progressing the eye disease stream of its drug discovery program, which had potential to deliver a new therapeutic to treat diseases such as Age-related Macular Degeneration (AMD) and Diabetic Retinopathy (DR).
"We have established efficacy in an animal model of eye disease and confirmed the 'druglike' properties of our compounds. We will now optimise these compounds, advance them to Phase I clinical trials in 2007/08 and seek a partner at that time," she said.
Dr Ramsdale said Alchemia's eye disease compounds had a unique mechanism of action, providing the company with a competitive advantage in an area of significant unmet medical need and one of intense interest from the world's major pharmaceutical companies.
"Current therapies are not effective for everyone and, with an aging population, the incidences of both AMD and DR are rapidly increasing," she said.
“In addition, with very few new drug candidates in clinical trials aimed at treating eye disease there is an opportunity for attractive partnering deals at quite early stages. Two Phase I licensing deals completed worldwide in the past two years have both been worth over $US300 million to the outlicensing biotech company."
Key dates for the SPP:
3 November 2005 Record date for the SPP
9 November 2005 SPP letter despatched
9 November 2005 SPP offer opens
2 December 2005 SPP offer closes
13 December 2005 Allocation under the SPP
13 December 2005 SPP despatch
ABN AMRO Morgans has been appointed sole lead manager to the capital raising.
ENQUIRIES:
Dr. Tracie Ramsdale
Alchemia Limited
Chief Executive Officer
Tel: 61-7-3340-0200
ENQUIRIES:
Mr Chris Neal
Alchemia Limited
Chief Financial Officer
Tel: 61-7-3340-0200
RELEASED BY:
Ms Josie Brophy
Phillips Group
Tel: 61-7-3230-5000
About Alchemia
Alchemia is a drug discovery company with a novel carbohydrate platform technology focused on the development of a generic Synthetic Heparin and on discovering a pipeline of oncology, eye disease and antibiotic therapeutics. Alchemia has leveraged its carbohydrate chemistry expertise to develop a more efficient, economical manufacturing process which Alchemia believes will ensure its generic Synthetic Heparin will be cost competitive with Arixtra® and other heparin-related drugs, providing Alchemia with a potentially significant market share of the $US3 billion worldwide heparin market.
Alchemia's generic Synthetic Heparin is being developed in collaboration with manufacturing partner, the Dow Chemical Company and marketing partner, American Pharmaceutical Partners and is expected to be launched in the US in 2008. |
