Suda Pharmaceuticals Ltd (ASX:SUD) (FRA:E4N) ended the second quarter of the 2021 financial year on a positive note, with a cash balance of $5.47 million after a successful capital raise and a refund from the Australian Taxation Office.
The company received a refund of $0.662 million under the R&D Tax Incentive Program, having committed $1.52 million to R&D to support ongoing development of its oral spray projects, including the development of anagrelide for financial year 2020.
SUDA chief executive officer and managing director Dr Michael Baker said: “It was very pleasing to see the Australian Government demonstrate positive sentiment towards the R&D Tax Incentive program as it is an important pillar of the innovation ecosystem.”
Heading into 2021, the company is focused on the development of its ZolpiMist oral treatment for insomnia.
Strongly supported placement
The company also raised $2.76 million in December through a well-supported placement to existing and new sophisticated investors.
A total of 76,708,975 shares were issued at $0.036 per share, representing an 8% discount to the weighted average closing price of shares over the preceding 10 days prior to the last trading day before announcement of the offer.
Due to the timing of the placement, the closing cash balance for the second quarter does not include the costs associated with the capital raise - which will be included in the Appendix 4C for the March quarter.
In connection with the offer, SUDA directors and management will contribute up to $50,000, subject to the approval of the shareholders in respect of the director’s participation at an EGM to be held on the 29th of January 2021.
Baker Young were the lead manager for the offer.
Funding OroMist development
The proceeds will be used by SUDA to continue advancing the development of the company’s low-risk oral sprays using its OroMist technology to reformulate existing pharmaceuticals.
Along with ZolpiMist, other oral spray products in development include treatments for migraines headaches, motion sickness, drug-resistant epilepsy and certain cancers.
The funds will also be used to identify and evaluate technologies for potential acquisition and for working capital.
Dr Baker said: “We are very pleased with the level of support that we received from sophisticated and professional investors for the placement.”
Notably, the company has advised today that Mitsubishi Tanabe Pharma Singapore Pte Ltd (MTPS) has indicated its intention not to proceed with the license and supply agreement for ZolpiMist.
MTPS cited a change in business strategy across the ASEAN region as their primary reason not to proceed with the agreement.
SUDA has agreed to terminate the agreement and notes that there is no immediate impact on revenue streams.
ZolpiMist is approved by the TGA and is marketed in the US and the company has rights to the product outside of the US and Canada.
SUDA will continue to focus on the remaining partnerships it has in place for ZolpiMist, look to secure additional partners for the ASEAN region and other territories and will continue to source and evaluate additional technologies for potential acquisition that align with the company’s areas of focus, oncology and the central nervous system.
In the near-term, the company will continue to identify and evaluate several technologies in the fields of oncology and the central nervous system.
SUDA will also continue to identify technologies from leading research institutes and intends to secure the technology that it believes best fits with its short to long term strategic objectives.
Dr Baker said: “There are many exciting technologies being developed across the globe.
“SUDA is continuing to work diligently to secure the technology that we feel best aligns with our core areas of focus and that will deliver value to our shareholders.”