(Alliance News) - Diurnal Group PLC on Friday said it intends to raise up to GBP7.0 million from a placing in order to support development of drugs Alkindi and Chronocort.
The price per share will be 32 pence, a 4.5% discount to pharmaceutical company Diurnal's 33.50p closing price on Thursday. Its shares were 1.8% higher at 34.10p each in London on Friday afternoon.
Given the amount to be raised and the price per share, it can be calculated that Diurnal will issue up to 21.9 million shares under the placing. This would increase the number of Diurnal shares in issue to 108.6 million from 86.7 million.
Money raised from the placing will help Diurnal to "continue the development of the European commercial organisation and roll-out of Alkindi", its paediatric adrenal insufficiency drug.
Paediatric adrenal insufficiency is caused by a lack of the hormone cortisol. It causes chronic fatigue and can result in death if untreated.
Placing funds will also go toward beginning "market access activities for Chronocort", its congenital adrenal hyperplasia drug. Dirunal is expecting approval for Chornocort in Europe in the first quarter of 2021.
Congenital adrenal hyperplasia is a condition in which patients have a block in cortisol production. This lack of cortisol causes the over-production of male hormones, and can lead to infertility and increased mortality.
Diurnal also said the placing will improve its "balance sheet in connection with licensing discussions for Alkindi and Chronocort in the US and the rest of the world" and help progress its early-stage pipeline toward clinical trials.
This early stage pipeline includes DITEST, Diurnal's "native oral testosterone formulation".
Diurnal Chief Executive Martin Whitaker said: "Diurnal has delivered against all the key milestones set out at the time of the Company's last fundraising, including the continued development of our commercial organisation and roll-out of Alkindi in Europe, as well as regulatory submissions for both Chronocort in Europe and Alkindi in the US. Funds raised as a result of this proposed placing will allow us to progress our vision of becoming a world-leading specialty pharma company in endocrinology, in particular through supporting the continued roll-out of Alkindi and commencing market access activities for Chronocort in Europe ahead of its anticipated approval in the first quarter of 2021.
"The bolstering of our balance sheet is also timely as we progress licensing discussions with potential US partners. We also expect the proceeds to provide funding to profitability for the company's late-stage cortisol replacement franchise."
Panmure Gordon (UK) Ltd is nominated advisor and joint broker on the placing, with Cantor Fitzgerald Europe being the other joint broker. Shareholder approval is required for the placing.
By Anna Farley; annafarley@alliancenews.com
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