PYC Therapeutics Ltd (ASX: PYC) has announced a massive $653 million capital raise to progress four of its drug candidates through human clinical trials.
With PYC’s value sitting at $944.8 million at the close of trade on Friday, the raise will grow the size of the company by 69.2% in one fell swoop.
New backers brought on board
The biotechnology company said on Monday that $128 million would be raised via an institutional placement to specialist life sciences investors, “led by RA Capital Management and including Perceptive Advisors, Driehaus Capital Management, MPM BioImpact, Rock Springs Capital, and RTW Investments”.
The remaining $525 million will be offered to existing shareholders as an entitlement offer, with the money to be raised at $1.50 per share, compared with the company’s last trading price of $1.60 per share.
The company’s shares have almost doubled over the past year, increasing from lows of 84 cents over the period.
PYC said in addition to the institutional placement it had received binding commitments for about $560 million in new shares, which it could choose to allocate as part of the capital raising, including if there is a shortfall in the entitlement offer.
Pipeline funded for coming years
The company said following the raise, it would be funded through to calendar 2030, “with clinical trial progress and important near-term human efficacy data expected in all four of its drug development programs”.
The four drug trials to be funded with the new money were looking into treatments for polycystic kidney disease, Phelan-McDermid Syndrome, retinitis pigmentosa, and autosomal dominant optic atrophy.
PYCÂ Chief Executive Officer Dr Rohan Hockings welcomed the support from new and existing shareholders.
We are grateful for the support of both existing and new investors in this financing round. We look forward to seeing the extent of the impact of each of these drug candidates with disease-modifying potential in areas of major unmet patient need as we move the pipeline towards regulatory approval.
Existing shareholders would be eligible to take up three new shares for every five shares they owned.
The company added:
PYC has entered into a binding underwriting agreement with multiple existing large shareholders in the company to subscribe for up to $200m worth of new shares in the event that the entitlement offer results in the creation of a shortfall. The underwriting shareholders have agreed to not take up some of their entitlement under the institutional entitlement to make shares available to new investors.
PYC shares remained in a trading halt on Monday morning.
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