Meditech nets $4.8m in placement

Queensland Investment Corporation has become the biggest shareholder in Melbourne-based company Meditech Research (ASX:MTR), after participating in a placement that raised AUD$4.8 million from QIC and other professional and sophisticated investors.

QIC took 15 per cent of the offered shares, giving it a 10.4 per cent stake in the company. The placement was priced at $0.31 per ordinary share, a 17 per cent discount on yesterday's closing price of $0.375.

Meditech CEO Chris Carter said the company was very pleased with the outcome.

In addition to the placement, Meditech's board has announced a shareholder purchase plan, in line with a commitment made in the company's 2002 annual report. The placement will allow shareholders to subscribe to up to $5000 worth of additional shares at $0.31. The offer closes on November 17.

"Our intention is to give shareholders the opportunities to participate in the achievements of the company," Carter said.

The funds raised will be used to expand ongoing development of the company's HyACT technology platform, which combines hyaluronic acid (HA) with chemotherapeutic agents to enhance the therapeutic activity of the drugs. Two Phase I clinical trials have already been completed. A Phase II clinical trial on HyCAMP, combining HA with irinotecan in a treatment for advanced colorectal cancer, started earlier this year.

The company is also developing HyAPE, an antifungal therapeutic product combining HyACT technology with a compound used to treat systemic fungal infections.

IN addition, Meditech is collaborating with Mark von Itzstein and Jenny Wilson at Griffith University's Institute for Glycomics to develop novel carbohydrate based therapeutics.

"We're leveraging the very significant knowledge base of both parties," said Carter.

Earlier this week, the company said it expected to enter into a collaborative development and licensing agreement for HyCAMP with the subsidiary of an international biotechnology company before the end of the year.

Meditech's share price rose more than 10 per cent following the announcement of the placement, closing at $0.415.