Paradigm Pharmaceuticals Raises Capital Via Placement And Institutional Entitlement Offer

Paradigm Pharmaceuticals Raises Capital Via Placement And Institutional Entitlement Offer

Paradigm Pharmaceuticals Limited (ASX: PAR) is a biotechnology company based in Australia. It is focused on repurposing Pentosan Polysulfate Sodium (PPS) which is an FDA approved drug which is used for safely treating inflammation and dissolving blood clots for over 60 years. Through PPS the company aims to treat Osteoarthritis which has more than 31 million sufferers in the USA alone. No other competing treatment has demonstrated all the combinations as the PPS demonstrates which includes safety, indicative regression of disease, subjective efficacy etc.

Institutional entitlement offers and placement

On 17th April 2019, the company announced that it has successfully completed institutional entitlement offer and placement and raised approximately $61.3 million. Out of the total fundraising, $51.6 million has been raised from professional and sophisticated investors through placement. The remaining $9.8 million has been raised through the institutional component of the offer’s fully underwritten 1 for 8 accelerated non-renounceable entitlement offer. The total proposed fundraising is of A$77.9 million comprising of $51.6m placement and $26.3 million underwritten institutional and retail entitlement offer

Retail entitlement offer

The entitlement offer for the retail shareholders would be open on Wednesday, 24 April 2019 and the eligible ones will be invited to participate in the retail component of the 1 for 8 pro-rata accelerated entitlement offer. The new shares will be issued at $1.50 which is the same price for the placement and institutional entitlement offer. The eligibility criterion for the retail participation in the offer is, they must have registered addresses in Australia or New Zealand and hold shares at 7:00 PM on the record date of 17th April 2019

Bell Potter Securities Limited has fully underwritten the institutional entitlement offer and the retail entitlement offer. All the new issued shares that will stand equally with the existing ordinary shares of Paradigm.

Use of the funds

The proceeds for the placement and entitlement offer is expected to be used towards company’s osteoarthritis (OA) and mucopolysaccharidosis (MPS) programs all the way to the end of their respective pivotal phase 3 clinical trials. Other uses of funds would be towards working capital, further preclinical studies, new drug applications, costs of offer and possibly further intellectual property acquisitions.

Statement from the Managing Director

Paul Rennie, MD of the company stated the board is pleased on the release of the osteoarthritis phase 2B secondary endpoint data and this capital raise. The board is confident that funding for its pivotal phase 3 clinical trials for MPS and OA are in place.

Important Dates

Here is the list of important dates relating to the placement and entitlement offer.

Source: Company’s official announcement released on ASX on 17th April 2019

Technical look

The company has a market capitalisation of A$266.57 million with 52-week high and low of A$2.149 and A$0.317. The stock is trading down by 5.172% at A$1.65 (as at Thu 18 Apr 19, AEST: 12:33 PM). In the past half year, the stock has delivered a massive return of 135.99%, and Year to Date return stands at 75.54%. Here are some more insights on the recent rally of the stock


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