Stem-cell-but-not company Koligo Therapeutics (ASX:KOL) has had to make some radical changes to its IPO offer.

The company has dropped its pre-IPO valuation by a whopping $5m, to $10m, at the request of institutions which didn’t want to buy in at that level. Its business is therapies for patients with chronic pancreatitis and Type 1 diabetes.

CEO Matthew Lehman said on Friday “a majority” of the fundraising had been done, but several institutions had side-eyed the valuation.

“In response to feedback from several institutions, and in an effort to improve the probability of the success of the IPO, with the intention of improving the aftermarket strength, the company has agreed to reduce the pre-money valuation for the IPO from $15m to $10m,” he said in a statement.

“The company expects that the reduction in the valuation may attract institutional investors.”

Cutting the valuation means the existing shareholders will be paid less as will the lead managers Novus Capital and APP Securities.

Koligo has slashed the amount it’s paying its existing shareholders by a third.

They were getting 75m shares and 25m performance shares. Now they’re getting 50m shares and 17m performance shares.

And a supplementary prospectus issued on Thursday revealed Koligo had pushed the offer closing date back by a month from March 22 to April 23, a move they’d reported to ASIC on February 15.

DIY organ replacement

The US company is trying to raise $6 million from ASX investors to expand everything from executive hires to sales of Kyslecel, a drug that uses a person’s own pancreatic hormone-producing cells to replace the organ and produce insulin.

Koligo is moving out of the highly personalised ‘cure-your-own-pancreatitis’ field and into a more biotechnical one, that will require its products to go through the usual route of clinical trials and FDA approvals. (They don’t currently need to.)

For example, it wants to develop 3D-printed fat-derived regenerating tissues to rebuild or replace damaged or diseased organs.

Stockhead is seeking comment from Koligo.