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Pharmaxis secures $24 million at premium to support partnering negotiations

The capital raising was priced at a premium to the last traded share price.
Pharmaxis scientist in lab
Capital raisings at a premium are rare and is a vote of confidence for the company

Pharmaxis Ltd (ASX:PXS) has secured $24 million in funding after receiving commitments from sophisticated and institutional investors for a two-tranche share placement.

Notably, the placement price is 32.5 cents, which is a 3.1% premium to the last closing price.

Funds will strengthen the balance sheet as the company conducts partnering negotiations for its clinical development program into lysyl oxidase 2 inhibitors (LOXL2), expected to occur in 2H18.

Major investment from global healthcare company Arix

The placement received strong support from specialist global healthcare investors including UK-based Arix Bioscience Plc (LON:ARIX), a global healthcare and life science company.

Arix has committed to invest $14.2 million and will emerge with an 11.1% shareholding post-approval.

In conjunction with the investment by Arix, the Pharmaxis board has approved the nomination of Edward Rayner to join the board pending shareholder approval at the upcoming EGM.

Existing shareholder BVF Partners LP has also committed to invest a further $7.1 million to increase its holding to 22.9%, the maximum allowable under ASIC creep provisions.

READ: Pharmaxis powering ahead with phase I LOXL2 studies

Pharmaxis’ CEO Gary Phillips said: “We are delighted with the strong support for the capital raising from Arix and BVF as we head into LOXL2 partnering negotiations.

“This will put the company in a strong position to negotiate the best partnering outcome and continue investing in its preclinical pipeline.

“Pharmaxis will also be strengthened by the global reach of Arix and the addition to the board, subject to shareholder approval, of Ed Rayner. Ed has 18 years of experience as an equity analyst and portfolio manager in Europe and Australia.”

$54 million in cash post-raising

Adjusting the cash balance for the two-tranche placement, the company would have a healthy $54 million pro‐forma cash balance at June 30, 2018, post-raising.

Early LOXL2 results have been attracting interest

As disclosed recently, data received to date from the phase I LOXL2 studies has attracted multiple interested potential partners.

Importantly, Pharmaxis has previously shown it can execute on deals with big pharmaceutical companies through its May 2015 deal with Boehringer Ingelheim.

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Pharmaxis Ltd Timeline

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