ReNeuron announces capital increase, funds to enter capital structure

Lifesciences group ReNeuron has announced that it has successfully raised 33m pounds in fresh funding to finance its research into stem-cell development, although it had to offer a small discount for the new equity. Significantly, three new investment funds are to enter its shareholder register with its directors also taking part in the fund raising exercise.According to the outfit the transaction will transform the company´s prospects, helping - amongst other things - to finance its therapeutic programmes through Phase II trials and consequent 'value inflection.'The exact amount of the funds raised by ReNeuron is £25.35m (before expenses). The placement of 1.01m new shares was oversubscribed.The issuance price of the new shares of 2.5p per share constitutes a 17.4% discount to the mid-market price as of the close of trading on July 19th, but a smaller 3.1% if compared to the average mid-market price for the last 20 business days prior to this announcement.The Welsh government is to provide an additional £7.8m through a grant package so that the company can establish a cell manufacturing and development facility in South Wales. The Company will move its principal operations to this facility over the next two years.Perhaps most significantly, three major new life science and generalist investors, including Invesco, Abingworth and the Wales Life Sciences Investment Fund LP, have taken up the opportunity to enter the share register.The well reputed Welsh life sciences entrepreneur, Sir Chris Evans, to be appointed as a non-executive director of the company upon closing of the placing.In aggregate its directors will invest £110,000 in the placing.Company updates on programmes and releases resultsIn parallel the company has today announced its preliminary results for the year ended March 31st, within which it has given an update on its therapeutic programmes and other activities.The company highlighted that it has received regulatory and ethical approvals received for the Phase I clinical trial of its REN009 stem cell therapy for critical limb ischaemia - with a study expected to commence in UK later this year It also plans to apply for Phase I/II clinical trial for its ReN003 stem cell therapy candidate for retinitis pigmentosa by mid-2014 in the US and the UK.For the year just ended ReNeuron announced a loss of £6.3m (2012: £6.2m) alongside a cash outflow from operating activities of £6.0m (2012: £5.8m). Cash and cash equivalents as of March 31st stood at £3.5m (2012: £4.0m).AB