Biotech company Phylogica has announced plans to raise $26.8 million through a rights issue, fully underwritten by chairman and major shareholder Alan Tribe, with the proceeds used primarily to fund pre-clinicial studies for its leading drug molecule.
Phylogica specialises in the development of cell penetrating peptides, with a focus on developing novel therapies to treat eye diseases.
It said the funds raised from the offer would go towards clinical development costs as well as bringing additional programs to the pipeline.
Phylogica will issue approximately 48.9 million shares at 5 cents per share early next month, in a one-for-five rights issue available to eligible shareholders in Australia and New Zealand.
The company said the issue price represented an 11 per cent discount to the closing price on October 30, and a 16 per cent discount to the 14-day volume-weighted average price.
The issue will be fully underwritten by Mr Tribe's company Australian Land.
Mr Tribe, who formerly owned Ikea franchises in Perth and Adelaide, joined Phylogica as chairman early last year and has become a major investor in the company.
Earlier this month, Phylogica partnered with Lions Eye Institute, trading under the name Vision Pharma, to help commercialise its drug delivery technology.
Mr Tribe said the partnership would help develop further treatments for retinitis pigmentosa, which is the leading cause of childhood blindness.
Shares in Phylogica were trading at 6.2 cents per share, as at 4:10pm AEDT.
