The options offering will give loyal shareholders the opportunity to cash in on PharmAust’s success over the next two years.
Clinical stage biotech company, PharmAust (ASX:PAA), is giving shareholders the opportunity to participate in a loyalty options entitlement at a very attractive price.
PAA is offering loyalty options to eligible shareholders on a pro-rata basis, with a strike price of 20c a share and an expiry date of 31 October 2023.
PharmAust will apply for quotation of the Options on ASX to be listed under ticker code PAAO.
The PAA share price is currently trading at 8c.
Eligible shareholders will be able to buy one option at an attractive price of just 1 cent for each four PAA shares held.
A Black & Scholes Valuation values the loyalty options at 4.1 cents each, so at a purchase price of 1 cent, there is significant upside for shareholders.
PharmAust stated it has approximately $2.54 million cash on hand, enabling it to pursue its various preclinical and clinical commitments over the next 12 months. Further, the Company has not received any funding from the $900k committed from FightMND as yet. Therefore, the funds raised (of up to approximately $750k) will be used as additional working capital and to meet Offer expenses.
“We are pleased to provide this offer to our shareholders as recognition of their invaluable support to the company,” commented PharmAust Executive Chairman, Dr Roger Aston.
“We’re making good progress in our projects, and look forward to achieving further milestones as we commence a number of clinical trials in 2022.”
PharmAust’s clinical trials and Epichem
The company is preparing for a number of clinical trials, as it pursues commercialisation for its lead drug, monepantel (MPL).
In June, PharmAust successfully treated 15 pet dogs in its Phase IIb studies of MPL to treat B-cell lymphoma, and is now on track for a Phase 3 trial.
The company is seeking partners within the global animal healthcare industry to co-develop and commercialise MPL for treatment of veterinary cancers.
PAA is also preparing several other studies, including a Phase II Human Cancer Trial to study MPL in diseases such as pancreatic cancer and oesophageal cancer.
A Phase I trial in human patients to treat COVID-19 is set to commence in April 2022, while a Phase I/II clinical trial on MPL for human patients with motor neurone diseases (MND) is set to commence in April 2022.
In the MND trial, PAA has received support from FightMND, a charity established with the purpose of finding effective treatments and a cure for MND.
FightMND has committed $881,085 to PAA, but so far has not paid the funds.
Meanwhile, the company’s wholly-owned subsidiary Epichem is ready to accelerate growth after fully paying off its debt liabilities in August.
The $750k loan Epichem owed to Export Finance Australia (EFA) was used to build state-of-the-art laboratories at Technology Park in WA.
The labs have world class equipment and expertise in synthetic and medicinal chemistry to support Epichem’s drug discovery projects, and for the cost-effective synthesis of its drug analogue libraries and intermediates.
What’s next
PAA’s directors will be among the eligible participants in the offering, and have advised that they intended to subscribe for their full pro-rata entitlement.
Funds raised from the offering will add to the $2.54 million of cash the company currently has on hand, and will be used as additional working capital and to meet some offer expenses.
The offering will be made via a prospectus and is not underwritten, and no minimum subscription for participants.
JP Equity Partners has been engaged to place any shortfall of the capital raise on a best-efforts basis.
The options are also non-renounceable, which means they can’t be bought and sold in the open market. Only shareholders resident in Australia and New Zealand are eligible for this offer.
PharmAust expects strong demand from shareholders to take up the opportunity to subscribe for the loyalty options, as it presents a great opportunity to further participate in any potential value appreciation in the next two years.
This article was developed in collaboration with PharmAust, 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.