(Sharecast News) - Healthcare therapeutics company Avacta tumbled on Thursday after a heavily discounted placing.
The company said it had successfully placed just under 51.3m shares at 50p each - a 34% discount to the closing share price on Tuesday - raising gross proceeds of £25.7m.
Avacta had initially been planning to raise around £20m, but the figure was increased due to "strong demand" from existing investors and potential new holders.
Announcing the placing on Wednesday, Avacta said the majority of the proceeds would be used to initiate and progress the dose expansion and Phase 2 efficacy studies for its lead pre|CISIONTM clinical programme, AVA6000, a tumour targeted form of the chemotherapy drug doxorubicin, and for general working capital until the end of 2025.
The dose expansions are expected to begin in H2 2024 in the USA, followed by the Phase 2 efficacy study, subject to funding and Food and Drug Administration approval, "which the board considers to be a major value-driving event for the group," it said.
Chief executive Alastair Smith said: "Under very challenging market conditions we have raised financing that allows Avacta to progress at full speed its lead pre|CISION targeted chemotherapy, AVA6000, into the expansion and Phase 2 efficacy studies. The emerging clinical data from the Phase 1 safety study strongly supports our belief that pre|CISION can change the way in which cancer is treated and we are pleased that we are now in a position to also progress the broader pre|CISION pipeline.
"Critically, this financing provides Avacta with 24 months of cash runway to focus on advancing AVA6000 through the clinic, as well as progressing other assets earlier in the development cycle to hit key commercial milestones."
At 0925 GMT, the shares were down 28% at 53.88p.
Avacta Group (AVCT)