Cancer play Rhythm Biosciences delivers 82.5pc stag profit on ASX debut
Health & Biotech
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The CSIRO’s latest spinout Rhythm Biosciences handsomely rewarded its backers on debut with an 82.5 per cent stag profit.
Rhythm Biosciences (ASX:RHY), which markets a technology that promises to better detect colorectal cancer, raised $9 million issuing shares at 20c each.
The shares spiked as high as 36.5c on debut Thursday — a premium of 82.5 per cent on the offer price. They closing at 32.5c — a 62.5 per cent gain for the day, valuing the company at $32.7 million.
It was a good day for ASX listings. Israeli agtech Roots Sustainable Agricultural Technologies also blossomed on debut, listing at a 75 per cent premium to its offer price.
The two biggest shareholders are Richard Vom, who owns 9.93 per cent via a company called Loumea Investments, and the company secretary Adrian Wing who controls at least 10.23 per cent.
Also on the register is youthful mining magnate Tolga Kumova, who has made fortunes with Syrah Resources, Alderan Resources, European Cobalt and more recently with Draig Resources.
Mr Kumova owns 2.63 per cent.
The biotech, which aims to have a product on the market in two years, owns the exclusive global licence for ColoSTAT, a blood test developed by CSIRO over 13 years.
CSIRO owns a small stake in Rhythm and will also receive a 2 per cent royalty on ColoSTAT sales.
“The good thing is you’ve got a technology that’s been researched and developed over 13 years in CSIRO,” Mr Wing told Stockhead.
“You’re talking about a technology dealing with a cancer that’s the second biggest cancer of mankind worldwide, but it’s one of the most curable by a simple blood test.”
Colorectal cancer is the second most lethal cancer killer in Australia, Europe and the US, and globally the third largest cause of cancer-related deaths. But if detected early, around 90 per cent of cases can be cured.
Detection however is via colonoscopies which are invasive, expensive and can have complications, while faecal tests are off-putting which lowers take-up, the company says.
Rhythm is planning to finish in the next two years two more studies, the last of which will be a 1000-patient trial in 2019 to assess the clinical performance.
Mr Wing said he put together a group of investors in 2014 and has spent the last two-and-a-half years developing a business plan to convince the right management to lead the project.
He convinced Dr Trevor Lockett to jump ship and join as CEO after 35 years at CSIRO researching prostate cancer gene therapy and colorectal cancer prevention.
Shane Tanner, who cofounded Zenitias Healthcare, and Lou Panaccio, the ex-CEO of Melbourne Pathology and Monash IVF, are on the board.