4D Medical's keenly-priced share raising lured the bargain hunters. Pic via Getty.
Health Check: Bargain hunters flock to 4D Medical’s discounted raising
Health & Biotech
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- 4D Medical raises $8.4 million in an oversubscribed share purchase plan
- With Opthea shares suspended, investors rough up other phase III stage biotechs
- Immutep doses first patient in its phase III lung cancer trial
Retail investors can respond indifferently to share purchase plans (SPPs), so it’s heartening that 4D Medical’s (ASX:4DX) effort has been oversubscribed.
The SPP raised $8.4 million, compared with the targeted $7 million.
Combined with the proceeds of a $5.5 million placement in February, 4D now has a proforma cash balance of $29.1 million.
4D has developed algorithmic lung-imaging tools that can explore the lung’s innards in a more granular way than traditional means.
The tech is especially useful for detecting ‘burns pit’ diseases suffered by US veterans in their line of duty.
The FDA cleared the first of two approved lung ventilation analysis software tools in 2020.
The company is now fronting the agency with a ventilation and perfusion device, which it claims to be cheaper and safer than current nuclear imaging.
The SPP was priced at 36 cents, compared to 42.5 cents paid by placement subscribers.
This in turn was a 23% discount to the prevailing price.
Subject to shareholder approval, SPP investors get a one-for-one option.
If these options are exercised (at a 55-cent strike price) they then get a ‘piggyback’ option – a trendy funding mechanism of late.
Late stage biotechs suffer the Opthea ‘contagion effect’
With Opthea (ASX:OPT) shares in suspension since yesterday’s revelation of shocking trial results, investors have directed their angst at other biotechs in – or close to – phase III stage.
Monday’s ‘victims’ included Clarity Pharmaceuticals (ASX:CU6) (down 9%), Immutep (ASX:IMM) (8%), Recce Pharmaceuticals (ASX:RCE) and Paradigm Biopharmaceuticals (ASX:PAR) (both down around 7%); and Imugene (ASX:IMU) (6%).
(Recce and Imugene this morning had clawed back some of their losses).
In each case, there was no company-specific news to explain the sell-offs.
In the meantime, shares in 31% Opthea holder Regal Partners (ASX:RPL) have lost around 14% of their value, or $125 million.
At Opthea’s current frozen valuation, Regal’s stake is – or was – worth $228 million.
Today, one of Regal Partners’ funds, Regal Investment Fund (ASX:RF1) disclosed a 5.6% Opthea stake.
Opthea on Monday reported that one of its phase III trials for the common eye disease wet age-related macular degeneration had failed to reach its primary endpoints.
The second trial, testing Opthea’s candidate sozinibercept against another standard-of care drug, is also in doubt.
Opthea’s solvency is in question, owing to the terms of a 2022 development funding agreement (DFA) that delivered the company US$170 million.
In a January 14 presentation, Opthea highlighted there was no amounts owed to the DFA investors if the clinical trials did not meet their clinical endpoints or if regulatory approval was not achieved.
The prezzo did have a qualifying footnote, which Opthea described as such yesterday:
“Termination can be triggered by a range of events, including … inability of Opthea to fund development costs, failure by Opthea to continue to use commercially reasonable efforts to develop sozinibercept, Opthea’s insolvency, or disagreement with the DFA investors.”.
Potential repayments range from nil, US$229.5 million, US$255 million, US$467.5 million or US$680 million.
Investors could be forgiven for picking up on the fine print because, like the Titanic, the trial wasn’t meant to sink.
Pending clarification from management, Opthea shares remain suspended on the ASX and the Nasdaq.
Immutep’s phase III lung trial is off and running
Speaking of late-stage trials, immune-oncology developer Immutep (ASX:IMM) this morning reported the first dosing in its pivotal phase III lung cancer study.
The first of an intended 756 patients at 150 clinical sites globally, the candidate was dosed at Australia’s Calvary Mater Newcastle Hospital.
The therapy, TACTI-004 is aimed at first line non-small cell lung cancer (NSCLC).
The trial is pitched at US Food & Drug Administration (FDA) regulatory approval.
The treatment combined Immutep’s drug candidate, eftilagimod alfa (Efti) with Merck & Co’s checkpoint inhibitor Keytruda as well as chemotherapy.
“Despite advancements in the treatment landscape for non-small cell lung cancer, there remains a high unmet need for new approaches that can safely extend patients’ lives,” says Calvary Mater’s Dr Ina Nordman.
NSCLC accounts for up to 85% of all lung cancer diagnoses.
Because the condition is often diagnosed at a late stage, fewer than 30% of patients are alive five years after diagnosis.
The placebo-controlled study’s dual primary endpoints are progression-free survival (the disease hasn’t got worse) and overall survival (the number of patients still alive, or dead from any cause).
EBR investors counting the sheep to FDA approval
EBR Systems’ (ASX:EBR) quarterly filing shows the wireless pacemaker developer’s transition from research and development stage to its commercial chapter, pending expected FDA approval.
A truncated version of the company’s ponderous 10-K filing to the US Securities and Exchange Commission, the filing shows EBR’s December quarter 2024 R&D expense fell to US$601,000 compared with US$2.51 million in the March 2024 quarter.
The company expended US$6.65 million on R&D during the calendar 2024.
December quarter product and manufacturing costs rose to US$2.32 million from US$493,000, as the company ramped up its inventory.
In a presentation, EBR chief John McCutcheon reiterated the company’s expectation of FDA approval “on or before” April 13.
That’s only 20 sleeps away … or even less.
The company cites an initial addressable market of US$3.6 billion for its devices, which are the only leadless devices for cardiac rhythm management.
EBR has US$66 million in cash and investments, which should suffice for the initial commercial rollout expected later this year.
