Bionomics to raise $16.4m in rights issue

Bionomics (ASX:BNO) has launched a fully underwritten rights issue to raise $16.4 million, which it will use to support its drug development programs.

The 1-for-8 non-renounceable rights issue is being underwritten by Bell Potter Securities, the lead manager in the raising.

The issue is priced at $0.36 per share, a 4.5 cent discount on Bionomics’ trading price before the company entered a trading halt in the lead-up to today’s announcement.

Funds from the rights issue will be used to support Bionomics’ development programs, including planned clinical trials of Alzheimer’s drug candidate BNC375.

It will also assist in the development of cancer stem cell directed drug candidate BNC101. Bionomics paid US$10 million to acquire US-based cancer stem cell drug development company Eclipse Therapeutics in September 2012.

The raising will improve Bionomics’ cash position to around $26 million. Its financial standing will also soon be lifted by the pending receipt of a milestone payment from its landmark US$345 million ($338.3 million) deal with Ironwood Pharmaceuticals for anti-anxiety candidate BNC210.

Bionomics said it expects the new funding will improve its ability to independently conduct clinical trials of drug candidates, instead of waiting for a commercialisation deal.

Bionomics (ASX:BNO) shares were trading 6.1% lower at $0.385 by around 2 pm on Monday, the day the rights issue was announced.