Rhinomed shares shoot up 40pc as it tops up coffers, mulls new cannabis products
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Medical tech company Rhinomed (ASX:RNO) has hit the ground running after coming out of a trading halt this morning.
Shares in the company jumped around 40 per cent to 33.5c, after the successful completion of a $6m share placement.
The funds were raised from new institutional investors along with existing shareholders.
Rhinomed said it would deploy the capital to bolster its existing multi-channel product strategy.
It will also launch a new line of Pronto CBD products to capitalise on the global growth of the consumer health market for medicinal cannabis, and look to boost distribution across its global store network.
The $6m was raised at 22c a share — an 8.3 per cent discount to Wednesday’s closing price. That discount has effectively risen a healthy 46 per cent following today’s surge.
Rhinomed’s top 20 investors now owned a combined 68 per cent share in the company, led by US-based Whitney George, who now owns a 25 per cent stake.
The company says it plans to expand its product range from two to six in the 2020 financial year, with the phased rollout of its Pronto CBD range. It forecasts FY20 revenues of $5.5m, a 42 per cent increase from the previous year.
“We are pleased to welcome multiple new institutional investors onto the register and appreciate the ongoing support from existing shareholders,” Chairman Ron Dewhurst said.
“The level of support speaks to the strong commercial opportunity and global potential of our proprietary platform technology and growing global distribution network.”
Rhinomed’s existing products include its Mute anti-snoring technology, a low-cost treatment for sleep apnoea (snoring) which has found demand from US troops in Afghanistan.
It’s first Pronto vapor-inhaler product — an FDA-approved sleep treatment — was launched in the US in July and the company said its nasal decongestion inhaler is on track for launch in December.
Following today’s bounce, Rhinomed’s share price moved closer to its 12-month high of 38c reached in July.
2020 is shaping up as an inflection point for the company’s value proposition, with four new Pronto CBD products scheduled for release.
Rhinomed said it would drive distribution in the US market via its relationship with Columbia Care, a listed medicinal cannabis company with operations in multiple states.
The company has an existing network of 11,000 US stores for its Mute sleep apnea treatment — a figure it wants to increase to 30,000 globally by 2021.