Noxopharm secures AU$26 million funding facility to ramp up the development of Veyonda®

Noxopharm Limited (ASX: NOX) plans to accelerate the development of Veyonda^® on the foundation of its encouraging interim results from both its DARRT-1 and LuPIN studies. The most recent interim data supports the company’s belief that its immuno-oncology drug candidate, Veyonda^®, represents a promising new class of anti-cancer therapy in the treatment of men with advanced, progressive metastatic castration-resistant prostate cancer (mCRPC).

The clinical stage drug development company has recently announced that it has secured AU$26 million funding facility that is expected to enable Noxopharm to enter the next round of clinical testing in the United States. The facility has been secured by the two New York institutional investors- CST Investment Funds, and the Lind Global Macro Fund, LP, managed by The Lind Partners, LLC.

Dr Graham Kelly, Noxopharm Executive Chairman, stated that facility of up to AU$26 million provides Noxopharm with the security of the additional capital that is required to go to the next level in the development of Veyonda^®.

Let us take a look at some of the features of the facility:

1. Laidlaw & Co. (UK) Ltd, located in the United States, was engaged as the financial advisor to the transaction.
2. In order to minimise shareholder dilution, the structure of the Facility allows the company to issue its ordinary shares at prices that are aligned to its trading prices on the ASX prevailing at the time, potentially at a premium to the then share price at that time.
3. In the initial round, the Facility would provide AU$4,000,000 to the company (prior to fees and expenses) that would comprise the first AU$200,000 tranche of ordinary shares and an AU$3,800,000 convertible security.
4. Noxopharm has the right to pause this Facility for up to three months or terminate the Facility at the cost of AU$150,000 termination fees. However, the company would have to pay no termination fee if the purchase price for any tranche is less than the floor price of AU$0.40.

Dr Kelly further highlighted the direct relationship between the increasing value of Veyonda^® and the growing capital requirement associated with the cost of its development. He stated that the further the Company takes Veyonda^® in the clinic, the more it holds confidence in its value and opportunity.

Noxopharm’s clinical programs are focused on testing the potential of Veyonda^® as an essential adjunct to radiotherapy, chemotherapy and in planning, potentially immuno-oncology, in the treatment of a varied range of cancers. Noxopharm believes Veyonda^® could play a primary role in all three of these cancer therapies. Dr Kelly added that the funding facility announced on 19 July 2019 would help the company towards achieving its goal of inducing abscopal responses in radiotherapy, the use of intravenous radiopharmaceuticals to treat a growing range of cancers and the ability to recruit the body’s innate immune system to fight cancer, through the use of its lead drug candidate Veyonda^®.

Working of ¹⁷⁷Lu-PSMA-617 in LuPIN trial (Source: Company July Newsletter)

According to NOX, the access to a flexible base level of funding would further allow Noxopharm to expand and accelerate its Veyonda^® clinical program into DARRT-2, CEP-2 and proposed immuno-oncology trials.

About Veyonda^®

Veyonda^® is currently being trialled in the treatment of late-stage prostate cancer. Planning is also underway for its trialled use in sarcoma, representing a potentially new and improved class of therapy for a cancer with few available treatment options. The structure of Veyonda^® represents an innovative dosage formulation of the anti-cancer drug candidate, idronoxil. Recent pre-clinical research at Noxopharm and a number of Australian and overseas researchers confirmed idronoxil (IDX) as a potent activator of the human body’s innate immune system.

Noxopharm’s management note that the actions of Veyonda^® as an immuno-oncology drug candidate and radio-enhancer align with emerging frontiers in cancer therapy.

Stock Performance: NOX stock is trading at $0.470 as on 29 July 2019 (11:05 AM AEST) with a market capitalisation of ~$60.29 million. Over the past six months, the stock has witnessed a positive price change of 17.07%.

In a separate announcement to the ASX on July 16, 2019, Noxopharm notified of Board changes; U.S. businessman Mr John Moore is no longer a director of Noxopharm and is now the Executive Chairman of the Noxopharm non-oncology spin-off, Nyrada Inc. In addition, experienced pharma executive Dr Beata Niechoda has been appointed as a Non-Executive director of Noxopharm.

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