Bionomics takes a bite of Big Apple bank

By Melissa Trudinger
Monday, 14 July, 2003

Bionomics has entered into a standby equity facility with an affiliate of the Bank of New York, allowing the company to sell up to six million shares through the affiliate group over the next three years.

"This financing arrangement is intended to provide Bionomics with additional capital to actively build our drug discovery and technology platforms ionX and Angene and our programs in epilepsy, breast cancer and angiogenesis," said Dr Deborah Rathjen, CEO and managing director of Bionomics.

Under terms of the arrangement, once Bionomics' share price hits AUD$0.50, the company will have the option to issue parcels of up to 500,000 shares to the US group at a slight discount to the market valuation. The purchase price will depend on the market valuation -- while Bionomics' market valuation remains below AUD$150 million, the group will be able to purchase stock at a discount of 3.5 per cent, and when it goes above $150 million, the discount will drop to two per cent.

The Bank of New York affiliate will also have the option to purchase a further 60,000 shares. But Rathjen said the group has no intention of becoming a major shareholder in Bionomics - rather, it will on-sell the shares issued to it through the ASX.

"It's essentially a series of mini-placements... a very flexible way of raising capital," said Rathjen. The share issues will be entirely under the control of Bionomics, and the company will not be obligated to issue the shares.

While the arrangement is the first to be made between the Bank of New York affiliate group and an Australian company, Rathjen said that a number of similar arrangements were in place between the banking group and US biotechnology companies.

The Bank of New York is the sponsor of Bionomics' American Depository Receipts program (OTC: BMICY). Rathjen said that the identity of the affiliate group, essentially a subsidiary of the bank, was confidential at the request of the group.

At the time of writing, Bionomics' shares (ASX: BNO) were trading at $0.28.