RNA therapeutics company Silence Therapeutics (LON:SLN) is planning to raise £27.3mln through a placing of shares at 240p a pop.
The fund raising was announced alongside the company's results for 2014, and the amount raised could rise to £40mln or so if the demand is there, which looks highly probable based on initial indications of interest from new and existing institutional shareholders.
The issue price represents a 14.3% discount to last night's mid-market closing price.
The proceeds from the share issue will be used to support and expand the company's pre-clinical capabilities and capacities, while the stronger balance sheet would enable the company to seek scientific talent from around the world.
As at 31 March 2015 the company had a net cash position of £19.2 million, which the board considers to be sufficient for its present needs.
As with all pre-revenue pharmaceutical companies, the results are not terribly relevant, but they do show a significant increase in research & development costs to £8.88mln from £5.65mln in 2013.
The loss before tax widened to £11.98mln from £9.00mln the year before.
The net cash outflow from operating activities in 2014 was £9.5mln, versus £6.8mln in 2013, against an operating loss of £12.0mln (2013: £9.0mln).
"2014 was a year of significant technological progress for Silence Therapeutics. As well as the ability to switch genes off using our modified siRNA and delivery systems, we added the ability to switch genes on by using the same delivery systems with a messenger RNA," said Ali Mortazavi, chief executive of Silence.
"After the period end, we announced highly encouraging data in our phase 2a pancreas cancer trial. The successes of the company have since led to a material capital raise and we are now in a unique position to capitalise on the tidal wave of genetic medicine," he added.
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