On Tuesday, Destiny Pharma (DEST ) said it plans to raise up to around £7m as it continues to progress towards Phase 3 trials in its two lead clinical assets, NTCD-M3 and XF-73 Nasal.
The clinical stage biotechnology company which is focused on developing medicines to prevent life threatening infections said the proceeds will also enable it to finalise regulatory plans, whilst also strengthening its balance sheet as it progresses partnering discussions.
The company said it has conditionally placed 11.86 million ordinary shares while certain directors of Destiny have agreed to buy an aggregate of 140,000 shares at the issue price.
The fundraising comes at “an important time” for Destiny. The Board decided to proceed “in very difficult market conditions” with the placing price being 19p below Monday’‘s closing mid-market price because it felt that any delay in activity on either of its key assets would significantly reduce the value of its products and leave Destiny “in a vulnerable position.”
CEO, Neil Clark, commented: “We are very pleased with the results of the fundraising and the support from our existing and new shareholders. The funds will allow us to continue our progress towards the Phase 3 trials in our lead clinical assets, NTCD-M3 and CF-73 Nasal.
The capital will also allow us to finalise the regulatory plans and strengthen the Company’s balance sheet as Destiny progresses its partnering discussions with regards to NTCD-M3.”
Shares in Destiny Pharma ticked up 2.00% higher to 51p during late morning trading.
Destiny Pharma’s NTCD-M3 is a Phase 3 ready treatment for the prevention of C. difficile infection (CDI) recurrence which is the leading cause of hospital acquired infection in the US.
The Group’s XF-73 nasal gel, which has recently completed a positive Phase 2b clinical trial, is targeting the prevention of post-surgical staphylococcal hospital infections including MRSA.
Last month, Destiny received positive scientific advice from the EMA stating that a ‘ simple, microbiological primary endpoint’ is acceptable for European approval of its XF-73 nasal gel.
The EMA stated that the XF-73 gel will measure the percentage of patients demonstrating decolonisation to a level of eradication. This is consistent with the primary endpoint used in the previous successful Phase 2b clinical study that reported ‘outstanding’ results in 2021.
Destiny Pharma said the EMA’s positive advice ‘identifies a clear route through European approval of XF-73 Nasal gel as a ground-breaking hospital infection prevention product.’
In a research note, analysts at research investment firm, Equity Development, acknowledged the ‘sensible’ decision of Destiny’s Board to proceed with the fundraising amid the ongoing ‘risk-off’ reaction to the war in Ukraine, and the potential for equity markets to suffer further.
Its fair value stood at £187.9m or 314p per share, with analysts noting that the dilution of the full fundraising and the final amount raised net of costs “will undoubtedly have an effect.”
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