DNL.L Share News (DNL)

(Sharecast News) - Speciality pharmaceuticals company Diurnal Group announced a proposed conditional placing with institutional investors to raise up to £8m before expenses on Friday, at a price of 60p per share, and an open offer to raise up to a further £2m.
The AIM-traded firm said the funds would be used primarily to support the continued development of its third product, 'DITEST', as well as commencing phase 3 preparation activities for 'Chronocort' in the United States, and progressing its early-stage pipeline.

It said the placing was being conducted by way of an accelerated bookbuilding process, which was launched immediately following its announcement on Friday morning.

Subject to successful closing of the bookbuild, the company said it was also making an open offer for up to 3,342,923 million shares, to raise up to £2m, on the basis of two open offer shares for every 73 existing shares held by qualifying shareholders at the record date.

The net proceeds of the capital raising would be used to progress the development and commercialisation of Diurnal's products, the board said, including the continued development of its native oral testosterone formulation 'DITEST', including completion of a phase 1 multiple ascending dose study in the US.

It would also be used to progress the early-stage pipeline into proof-of-principle clinical studies, including the modified-release T3 programme, as well as for the start of phase 3 preparation activities for 'Chronocort' in the US, and preparation for 'Alkindi' and 'Chronocort' in Japan.

Taking into account its existing cash resources and marketing approval for 'Alkindi' in both Europe and the US, based on the board's current assumptions, including a successful marketing authorisation for Chronocort in the first quarter of 2021 and the subsequent launch of Chronocort, Diurnal said it was funded to profitability for its late-stage cortisol replacement franchise.

It noted that the issue price represented a discount of about 9.8% to the mid-market closing price of its shares on 8 October.

"Diurnal has continued to make excellent progress in 2020 despite the challenging global conditions," said chief executive officer Martin Whitaker.

"We have partnered 'Alkindi Sprinkle' with Eton Pharmaceuticals in the US, and subsequently received approval from the US FDA."

"These new funds will be used primarily to support the continued development of the group's third product, 'DITEST', as well as commencing phase 3 preparation activities for 'Chronocort' in the US and progressing the group's early-stage pipeline."

At 1602 BST, shares in Diurnal were down 5.26% at 63p.