Epitan raises AUD$3.5 million in private placement

Melbourne's Epitan (ASX:EPT) has raised AUD$3.5 million by way of a private placement, assisted by Mariner Corporate Finance, to institutional investors in Europe and Australia.

"Biotech's been pretty awful the last six months and we, like many others, have watched our share price get down pretty low. I think that [the placement is] just a boost of confidence in the company and what we're doing," said Epitan CEO Iain Kirkwood.

A total of 11,666,668 shares were placed at $0.30 per share. The five-day volume weighted average price prior to placement was $0.356 and shares were trading at $0.40 at the time of writing.

"I'd prefer to be raising money at higher share prices but from time to time in the biotechnology world you've got to be very pragmatic," said Kirkwood.

Subscribers to the placement include Absolute Octane Fund Limited in Europe and Ausbil Dexia, Cadence Management, Myer Family and Wilson Asset Management in Australia.

"We're delighted obviously to have the European fund support us. We're also delighted to have investors of the calibre of Wilson Asset Management, the Myer Family and Ausbil Dexia," said Kirkwood. "To get their support, albeit it in this very small fund raising, means that they've got faith in where we're heading."

Epitan was forced to suspend plans to list on London's AIM stock market with the hope of raising £15 million (AUD$37 million) earlier this year.

Kirkwood said that this private placement is one step towards compliance listing on AIM in the future, probably before the end of the year.

"While we're disappointed to have to suspend our AIM ambitions, we feel that the market -- when the clouds disappear -- will be very receptive to us again," he said.

The money raised will be used to progress Epitan's drug development program. "It will top up what we've got and just increase our liquid assets, our cash reserves, which is very useful," Kirkwood said.

He added that results from Epitan's polymorphus light eruptions proof of concept trials currently underway in Europe should be available by August.

Mariner Corporate Finance has been granted 1 million unlisted options as part of the private placement, exercisable over two years at an exercise prices of $0.30 per share. If exercised, the options would provide Epitan with a further cash injection of $300,000.