Pharmaxis raises $16.5m in placement

Pharmaxis (ASX:PXS) has raised AUD$16.5 million in an oversubscribed placement to institutional and sophisticated investors in Australia.

22 million shares priced at $0.75, a discount of 8.9 per cent to the volume weighted average of the past 30 days, will be issued in two tranches, with 16.2 million shares to be issued on November 12, and the remaining 5.8 million shares after approval by shareholders at the AGM on December 13.

"Importantly, we got some good support from institutions, increasing our institutional investor base significantly," said CEO Alan Robertson.

The company also announced a share purchase plan to allow existing investors to purchase up to $5000 of shares at the same price as offered to institutions. The SPP opens on November 10 and closes on December 3.

"We're following [the placement] up with a share purchase plan not so much to raise capital but to make sure existing shareholders have an opportunity to buy shares at the same price and not feel disenfranchised," Robertson said.

With more than $39 million in the bank, Pharmaxis is moving to finalise its plans for a Phase III trial of Bronchitol as a treatment for bronchiectasis, which successfully completed Phase II trials earlier this year. Robertson said the company now had sufficient cash to fund the trial, without having to go back to the market.

He said the company was in the process of refining the protocol at the moment and expected to commence the 12-month trial in the first half of 2005. If the trial is successful, registration will be sought in major jurisdictions in the latter half of 2006, with an expected launch date in mid-2007.

Bronchitol is also in Phase II clinical trials as a treatment for cystic fibrosis, but Robertson said plans to continue the trials into Phase III would depend on the Phase II results. In any case, he said, with the expected launch of the company's asthma diagnostic Aridol in mid-2005, further funding of clinical trials would potentially come from revenues generated.

"We don't expect to have to go back to the market for a while," he said.