Chemeq chuffed by capital raising

Chemeq (ASX: CMQ) has raised another $2.75 million as a result of a share purchase plan offered to its shareholders last month, bringing the total amount of funds raised recently to about $7.5 million.

Following a share placement to institutional and other sophisticated investors, Chemeq offered all of its existing shareholders to purchase up to 3000 shares at $2 each.

"We are delighted by the response to our share purchase plan," said CEO Dr Graham Melrose. "We see this support as a significant endorsement of the company."

He said that more than 50 per cent of shareholders purchased additional stock in the company. "Considering the share price, it was an excellent response," Melrose said.

According to Melrose, the funds will be used almost exclusively for the construction of Chemeq's new manufacturing plant near Perth. The company expects the new facility to be producing commercial quantities of its first product, CHEMEQ polymeric antimicrobial, by the first quarter of 2003.

The new antimicrobial is an alternative to the use of human antibiotics in livestock and has potentially a very large market for use in pigs and poultry.

Chemeq initially plans to distribute the product in Asia, followed by Australia, the US and other markets.

They are currently seeking approval from regulatory authorities around the world, said Melrose. "The FDA is fast-tracking the approval process as it is the only apparent substitute for antibiotics."

Chemeq's share price increased today following the announcement. At the time of writing it had increased more than 8 per cent to $2.49.