ASX-listed biotech company Prana Biotechnology Limited (ASX: PBT) received a Research & Development Tax Incentive Refund of A$3.3 million in cash under the Australian Government’s tax incentive scheme.
In the announcement dated 18 March 2019, Prana Biotechnology Limited announced that it has received the tax incentive refund with respect to the cost of eligible research and development activities conducted during the 2018 financial year.
Prana intends to utilise the funds for further research and development activities. This refund will further strengthen the company’s cash position which was reported as $8.4 million at the end of December 2018. The Group is a development stage medical biotechnology company and as such expects to be utilising cash until the results of its research activities have become marketable.
At the end of December 2018, Prana inked a securities purchase agreement for a lead investment with Life Biosciences LLC to raise up to A$44.5 million. As per the terms of the agreement, Life Biosciences will initially invest A$10.6 million along with allowing Prana to raise an additional A$2.8 million from other investors, subject to shareholder approval at a General Meeting. In addition, the Group may also receive up to circa A$31 million from Life Biosciences and other investors on the exercise of short-term warrants being issued as part of the transaction; however, reportedly there is no commitment in this regard.
Management and the Directors believe that the Group will continue as a going concern as it is expected to obtain necessary shareholder approval required for receiving the equity-based funding of A$10.6 million.
For the six months ended 31 December 2018, the Group incurred an operating loss of A$5,340,227 and an operating cash outflow of A$7,221,765 compared with an operating loss of A$3,617,439 and an operating cash outflow of A$1,172,663 for the six months ended 31 December 2017. During the period, Prana has reported continued progress on identifying new development candidates by Prana’s discovery chemistry group. The Group told that these product candidates are within new generation chemical scaffolds and have demonstrated key attributes required to address neurodegenerative processes.
Prana Biotechnology Limited primarily operates in two segments, one being research into Parkinsonian movement disorders, Alzheimer's disease, Huntington disease and other neurodegenerative disorders. As at 31 December 2018, the net assets of the Group stood at A$10,922,966 compared with A$16,081,157 at June 30, 2018.
The Group has made significant progress in the Phase 1 study of PBT434, which is a single- and multiple- ascending dose trial in healthy volunteers. The study is progressing well as it has completed the single ascending dose phase of the research and Prana anticipates completing the multiple ascending dose phase, including elderly volunteers, in the first half of 2019.
The company’s General Meeting is due to be held on 5 April 2019 in Victoria, Australia.
In today’s trading session, Prana stock price has jumped up by 8.69% to $0.050 on 18 March 2019 (1:13 PM AEST). Over the past 12 months, PBT has declined massively by 16.36% despite a surge of 35.29% over the past three months.
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