Rainforest drug-maker Qbiotics wants to raise $26m but it’s not sure when it will list
Rainforest drug-maker Qbiotics has issued a prospectus to raise up to $26 million — but it’s not sure when it will make it to the stockmarket.
It’s not the first time Qbiotics has made a run at an initial public offering.
In 2016 the anti-cancer drug-developer — which is chaired by Cochlear and ASX boss Rick Holliday-Smith — raised some $60 million from “high-net-worth mums and dads” before a short-lived run at the ASX.
QBiotics was originally a subsidiary of a business called EcoBiotics which was formed in 2000 “to discover novel, biologically active chemicals from the Queensland rainforests”.
QBiotics — a drug developer with a focus on a substance called “tigilanol tiglate” — was spun-off in 2015 ahead of a planned IPO to fund an anticancer drug and a wound-healing treatment.
Tigilanol tiglate is said to be a naturally-occuring substance found “in a small number of closely related plants that occur in Queensland’s rainforests where it acts as a chemical deterent to predation”.
QBiotics says it discovered tigilanol tiglate via an inhouse technology called EcoLogic that “integrates an understanding of the rainforest ecosystems with specifics of mammalian biology to discover new chemicals with potent bioactivity”.
Its scientists now produce tigilanol tiglate from the seed of an Australian native shrub called Fontainea — which are now grown in plantations (see picture below).
QBiotics issued a prospectus in 2016 to raise $10 million to $12.5 million selling shares at 40c apiece.
But the float was later pulled — and the directors decided to “re-merge” with EcoLogic — now known as the “QBiotics Group”.
This week the combined group lodged a new prospectus to raise up to $26 million at 60c a pop.
Mr Holliday-Smith notes in the prospectus that “existing shareholders have supported the company through multiple funding rounds and are keen for a liquidity event”.
That doesn’t look likely to happen any time soon however.
The prospectus elsewhere notes “there is no liquid market for the trading of shares… Therefore, an investment in QBiotics should be considered a long term, high risk, illiquid investment”.
Qbiotics — which does not yet make any money — plans to “eventually apply for listing of its shares on an appropriate stock market” but there is no time-table.
Qbiotics says it recently completed human clinical phase I and IIA trials for tigilanol tiglate — mainly focused on safety and tolerability of the drug.
(Clinical trials are generally divided into three phases where Phase 1 focuses on safety, Phase 2 tests for effectiveness and Phase 3 examines whether the new drug is an improvement on existing treatment. Sometimes trials are further divided into parts A and B, where a B stage is generally more rigorous.)
Qbiotics reckons results from the study “were remarkable for a first-in-human trial”.
“Significantly, a maximum tolerated dose (where the study is stopped due to signs of patient toxicity) was not reached.
“Signs of clinical efficacy were noted in all tumours treated (even at the lowest dose cohort) and in nine different tumour types.”
Qbiotics is now planning a further Phase IIA trial using tigilanol tiglate to treat head and neck cancer.
Qbiotics is hoping for regulatory marketing approval for tigilanol tiglate in the US “late 2019 or early 2020” and in Europe and Australia around the same time.
“We intend to launch the drug soon afterwards into those markets,” the prospectus says.
Qbiotic is also develping a wound-healing drug called EBC-1013 which has so far only been tested in animals. Some of the IPO funds would go towards human clinical trials.
The offer is open from November 16 to December 10.