MGC Pharma secures $10m capital raise from US and UK investors to advance development for its lead drug candidate, CimetrA
Health & Biotech
Health & Biotech
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As COVID-19 continues to cause havoc globally, MGC Pharma will use a £5,500,000 (~A$10.3m) capital raise to advance emergency use applications and testing of CimetrA for treatment of patients in Europe and Asia.
European-based biopharma company, MGC Pharma (ASX:MXC) has closed a £5,500,000 (~A$10.3m) capital raise, with the funds to be used for emergency-use authorisation applications and testing of its lead drug candidate CimetrA in five key countries.
The share placement in the London market was strongly supported by a mix of institutional and family office investors from the UK and USA, comprising both new and existing shareholders.
Shares will be issued at a price of 2 pence (~$0.038) each, representing a 13% discount to the LSE closing price on November 29, 2021, the last trading day before release of the placement announcement.
Once issued the placement will represent ~10% of the company’s ordinary shares on issue.
Boutique UK Stockbroker, Turner Pope Investments, acted as lead manager and bookrunner for the placement.
At settlement, MGC Pharma will issue 275,000,000 new shares out of its current ASX listing share placement capacity.
Funds raised from the capital raise will be used for emergency authorisation applications and testing procedures in five key countries in Central and Eastern Europe and Central Asia.
CimetrA is the pharmaceutical version of MGC Pharma’s nutraceutical branded product, ArtemiC, which is already being sold by Swiss PharmaCan in Europe.
CimetrA (and also ArtemiC) is anti-inflammatory, and according to the company has been proven to reduce the hyper-inflammatory response seen in some COVID-19 patients, known as “cytokine storm”.
The drug is in late clinical development and as the world continues to grapple with COVID-19, a number of global companies have expressed interest in the drug – including potential clients in the US and India.
In August MGC Pharma signed a US$24 million three-year deal with US distributor AMC Holdings to supply its products into the largest market in the world.
In early September, MGC Pharma was given the green light by the Indian government to import CimetrA, to help treat COVID-19 patients.
For MGC Pharma, there is a clear case for expediating emergency authorisation application processes given the ongoing COVID-19 pandemic, and the recent emergence of Omricon, another new strain of the virus.
Since its dual listing on the London Stock Exchange in February, MXC has been focused on developing its clinical pipeline, and taking steps towards market authorisation for its products.
Funds from the capital raise will also be used for additional CimetrA dosing trials in the USA and Russia to comply with FDA prerequisites for approval along with CannEpil trials in the US.
CannEpil, a phytocannabinoid derived IMP, is designed to treat Drug Resistant Epilepsy, which affects ~33% of the 50 million epilepsy sufferers worldwide.
MGC Pharma will also use funds from the capital raise for the fit-out and commissioning in of its new production facility in Malta – scheduled for completion in the first half of next year.
The opening of the new facility will create a European manufacturing hub for CimetrA, as well as for other liquid form dose medicines.
It will also put MGC Pharma in a strong position to streamline global distribution, given the strategic location of Malta which offers convenient shipping access to all parts of the European continent.
MGC Pharma was given a cash grant by Malta Enterprise of 3.1 million euros in December last year, to build out and extend the clinical research facility, which was officially opened last month.
MGC Pharma co-founder and managing director Roby Zomer said the latest capital raise will provide MGC Pharma the funds required to continue progress made this year with its clinical pipeline.
“In the last few months, we have made real progress on advancing CimetrA towards emergency use authorisation in key territories, all while achieving record revenue figures on our products, including ArtemiC,” he said.
“With completion of our CimetrA Production Facility in Malta now awaiting its fit-out, we will soon be in a position to meet the expected demand for this product when we achieve emergency use approval in key territories and make a difference to the treatment of COVID-19 patients.”
Zomer said by looking for emergency use approval of CimetrA in the USA and India, two of the largest pharmaceutical markets in the world, amongst others, the company is showing its belief in the product, and ambition for MGC Pharma.
He said benefits of CimetrA were being shown in trials and as more variants emerge the company was hopeful the drug could treat the pathophysiological mechanism of the disease.
“Everyone at MGC Pharma is ready to build on the excellent work that has been done so far, and to deliver for our shareholders and patients globally.”
This article was developed in collaboration with MGC Pharma, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.