Shares of Wetherby-based life sciences company Avacta Group fell more than 25% after it carried out a heavily discounted share placing.
The company said it successfully placed about 51.27 million shares at 50p each — a 34% discount its closing share price on Tuesday — to raising gross proceeds of £25.7 million.
The company said in a stock exchange statement: “Avacta Group plc … is pleased to announce that, further to its announcement on 28 February 2024, the company has successfully placed 51,269,609 placing shares at the offer price of 50 pence per placing share with new and existing investors, including a number of high quality institutions and a European specialist healthcare fund.
“In light of the strong demand received both from existing investors and potential new holders, the board has decided to increase the size of the placing from approximately £20 million to £25.7 million.
“Concurrently with the placing, certain directors of the company have subscribed for, in aggregate, 130,000 direct subscription shares pursuant to the direct subscription at the offer price.
“The pacing shares and direct subscription shares represent, in aggregate, approximately 17.8% per cent. of the issued share capital of the company immediately prior to the announcement of the placing …
“As announced on 28 February 2024, the company is also undertaking a REX Offer, which is expected to close for applications at or around 11.00 a.m. on 4 March 2024 (although, eligible investors should note that financial intermediaries may have earlier closing times.).
“The results of the REX Offer are expected to be announced on or around 4 March 2024 …”
Avacta Group CEO Alastair Smith said: “Under very challenging market conditions we have raised financing that allows Avacta to progress at full speed its lead pre|CISION targeted chemotherapy, AVA6000, into the expansion and Phase 2 efficacy studies.
“The emerging clinical data from the Phase 1 safety study strongly supports our belief that pre|CISION can change the way in which cancer is treated and we are pleased that we are now in a position to also progress the broader pre|CISION pipeline.
“Critically, this financing provides Avacta with 24 months of cash runway to focus on advancing AVA6000 through the clinic, as well as progressing other assets earlier in the development cycle to hit key commercial milestones.”