Late last night the molecular diagnostics company genedrive (LON:GDR) declared that it is seeking to raise over £6m of fresh funds, through a deeply-discounted issue of new shares at just 1.5p each.
The shares of the Manchester-based company, which serves the medical, biotechnology, and pharmaceutical industries in the UK, Europe, the U.S., and internationally, closed at 3.25p each.
The Fundraising
After-hours it announced its intention to raise that sum through a combination of a Firm Placing, a Conditional Placing, a proposed retail offer through the REX portal and by way of an Open Offer to existing shareholders.
However, the issue of the new shares to raise not less than £6m will be at a price discounted by over 57.1% to the 1.5p nominal ordinary share price.
The Firm Placing is for 11,173,994 new shares to raise £0.17m.
The Conditional Placing is for around 155,492,673 new shares, raising £2.3m.
The REX Offer is for up to 233,333,333 new shares for £3.5m.
The Open Offer, a 1 for 1 to existing holders, could raise £2.1m.
The Retail Capital Markets ‘REX’ portal, which is owned and operated by broker Peel Hunt, has confirmed that intermediaries AJ Bell, Hargreaves Lansdown and interactive investor will be participating in the REX Offer.
The Use Of Funds
The net proceeds of the Fundraising will be used, amongst other things, to underpin and grow the group’s operations and accelerate commercialisation throughout the UK, Europe and the Middle East.
It will also be used to fund clinical studies and regulatory submissions in the U.S. for the group’s MT-RNR1 ID kit (“AIHL test”), having recently contracted with a leading multi-state physician organisation in the U.S. to support clinical studies required for engagement with the U.S. Food and Drug Administration (“FDA”).
The Business
Pharmacogenetics informs on how your individual genetics impact a medicines ability to work for you, so by using pharmacogenetics, medicine choices can be personalised, made safer and more effective.
This helps clinicians to quickly access key genetic information that will aid them make the right choices over the right medicine or dosage to use for an effective treatment, particularly important in time-critical emergency care healthcare paradigms.
Operating out of its facilities in Manchester, the company has a clear commercial strategy focused on accelerating growth through maximising in-market sales, geographic and portfolio expansion and strategic M&A.
The testing company is developing and commercialising a low-cost, rapid, versatile and simple to use point-of-need pharmacogenetic platform for the diagnosis of genetic variants.
The Flagship Products
The company has launched its two flagship products, the Genedrive® MT-RNR1 ID Kit and the Genedrive® CYP2C19 ID Kit, both developed and validated in collaboration with NHS partners and deployed on its point of care thermocycler platform.
Both tests are single-use disposable cartridges which are ambient temperature stable, circumventing the requirement for cold chain logistics.
The tests have undergone review by the National Institute for Health and Care Clinical Excellence and have both been recommended for use in the UK NHS.
The Genedrive® MT-RNR1 ID Kit
The group’s Directors believe the Genedrive® MT-RNR1 ID Kit is ‘a worlds-first’ and allows clinicians to make a decision on antibiotic use in neonatal intensive care units within 26 minutes, ensuring vital care is delivered, avoiding adverse effects potentially otherwise encountered and with no negative impact on the patient care pathway.
The CYP2C19 ID Kit
Its CYP2C19 ID Kit, which has no comparably positioned competitor currently, allows clinicians to make a decision on the use of Clopidogrel in stroke patients in 70 minutes, ensuring that patients who are unlikely to benefit from or suffer adverse effects from Clopidogrel receive an alternative antiplatelet therapeutic in a timely manner, ultimately improving outcomes.
Runway Just Seven Weeks To Go
The company has noted that should it receive the net proceeds from the Firm Placing but no proceeds from the Conditional Placing, the Rex Offer or the Open Offer, its cash runway will remain extremely limited, it will only have around seven weeks of working capital.
In that case the company would urgently need to seek further financing which may or may not be available at all or, if available, may be on commercially unacceptable terms and could lead to more substantial dilution for its shareholders than would be the case under the proposed Fundraising.