You wouldn’t read about it: biotechs with a decent story to notify are rushing to tap funding in difficult capital-raising conditions. Pic: Getty Images
- A slew of biotechs are raising funds on the back of positive announcements
- Genetic Signatures wields the scythe in cost-cutting blitz
- Aroa completes a key trial while Cynata is almost done, too
Junior ASX biotechs are successfully raising capital, but the golden rule is only to go to market if you’ve obtained a decent story to notify.
In a flurry of activity, Lumos Diagnostics (ASX:LDX) has completed an $18 million capital raising and launched a $2m share purchase plan (SPP).
Meanwhile, fellow diagnostics hoapply Atomo Diagnostics (ASX:AT1) today stated it was in the market to raise up to $4m.
This is by way of a $3m placement and a SPP of up to $1m. The company prices the offer at 3.3 cents a share, a 10% discount.
The timing is no coincidence.
Why? Atomo supplies its hardware (cartridges) for Lumos’ Febridx point of care devices, which distinguish between viral and bacterial diseases.
On Friday, Lumos stated it had won a long-awaited CLIA waiver from the US Food and Drug Administration (FDA).
This means a wider population of health professionals can apply the test, greatly expanding the company’s US market.
Lumos has priced the raising at 22.5 cents per share. That’s a 15% discount to the average five-day price leading up to last Tuesday’s trading halt
The company has scheduled an investor webcast for Tuesday morning.
Firebrick joins the rush
Not to be outdone, Firebrick Pharma (ASX:FRE) on Friday entered a trading halt ahead of a placement, after securing Indonesian regulatory approval for its Nasodine nasal spray.
Nasodine is an up-your-nose version of the common topical antibacterial and antiviral agent Betadine.
Meanwhile, lung imager 4D Medical (ASX:4DX) on Friday went to the well for a surprise $83m private placement at $5.90 per share (a 6% discount).
This followed news of European clearance for the company’s ventilation perfusion tool CT:VQ.
This month Imugene (ASX:IMU) completed a $12m placement, mainly to institutional investors locally and in Hong Kong. The deal was done at 18 cents per share with a follow-up SPP.
This followed a positive update from the company’s immuno-oncology program called Azer-cel.
“It’s a sign of the times that brokers and companies don’t believe the market has the appetite to put capital in without news to back it up,” declares sector analyst Jason Segal, a.k.a. the Armchair Analyst.
Rhythm rollout gathers pace
Rhythm Biosciences (ASX:RHY) declares the local roll out of its predictive bowel cancer test Colostat is gaining momentum across two key channels.
The first is its tie-up with 4Cyte Pathology, with 78 commercial collection centres activated across both regional cities and the capitals.
This is double the number from mid-March.
The second conduit is the company’s Colostat Access Program, which now has ten participating sites in Victoria, NSW and Queensland.
“The program is an important market enattempt and real-world evidence collection platform and we’re starting to receive real momentum with the participation,” Rhythm CEO Dr David Atkins stated.
Colostat is a simple blood-based asdeclare which could replace – or complement – the current ‘poo test’ as a screening tool
On March 11 the company announced its first commercial sale, via 4Cyte.
Rhythm shares are receiveting in the groove, having gained 40% year to date and more than 130% over the last 12 months.
Genetic Signatures’ cost-cutting blitz
Speaking of point-of-care tests, gut bug detector Genetic Signatures (ASX:GSS) is wielding the axe in a $5 million cost-cutting campaign that includes up to 30 redundancies.
The “significant organisational restructure” is the early work of incoming CEO, Maria Halasz.
The company expects to realise the cost savings, which represent about 20% of the company’s annual operating expenses, from 2026-27.
Management expects one-off redundancy costs of around $800,000.
Genetic also will outsource some development work to contract research organisations.
In mid-2024 the FDA cleared Genetic’s flagship Easyscreen asdeclare.
The test detects up to eight gut parasites in one go, but sales have disappointed to date.
Genetic reported December (first) half revenue of $8.7 million, 2.3% higher. The company narrowed its loss to $6.4m, from $15.2m previously.
Year to date, Genetic shares have lost two-thirds of their value.
Interestingly the company’s sub $20m market cap is less than its $30m cash backing.
Symphony trial hits the right note for Aroa
Wound management hoapply Aroa Biosurgery (ASX:ARX) has completed trialling its Symphony product, for difficult diabetic foot ulcers (DFUs).
“Preliminary findings indicate the trial met its primary concludepoint, assessing whether more diabetic foot ulcers healed within 12 weeks with Symphony than with standard of care,” Aroa declares.
As per protocol, the company now awaits a write-up in a peer-reviewed journal.
Symphony is a matrix-like skin substitute, based on Aroa’s extracellular matrix (ECM) platform. ECM derives from biological material: sheep guts to be precise.
Recruiting up to 150 patients across US sites, the trial tested the safety and performance of Symphony with chronic grade one and two DFUs.
Patients were randomised to receive either Symphony or standard dressings.
“Randomised controlled trials are the most robust form of clinical evidence, and these results clearly validate Symphony’s clinical value,” stated Aroa CEO Brian Ward.
The company expects to announce the full results “in coming months”.
… While Cynata’s trial is done and dusted
Stem cell drug developer Cynata Therapeutics (ASX:CYP) has conducted the last patient visit in its adult graft versus host disease (GvHD) trial.
The visits took place at the 100-day primary evaluation period, which means the trial custodians can now analyse the results.
The randomised, double-blinded, placebo-controlled study enrolled 65 patients, across sites locally and in the US and Europe.
The participants received the standard of care steroids, as well as either Cynata’s candidate CYP-001 or a placebo. The company expects to release the results in June.
GvHD is a life-threatening complication of bone marrow transplants.
Stem cell peer Mesoblast (ASX:MSB) in late 2024 won breakthrough FDA approval, for paediatric patients.
The FDA has bestowed orphan drug designation status on CYP-001, which means potentially quicker approval.
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