Placement nets $10m for GTG

Genetic Technologies (ASX:GTG) has raised AUD$10 million in a share placement to institutional and professional investors, managed by Sydney boutique investment bank EG Capital.

The placement is the first in the company's 13-year history, executive director Dr Mervyn Jacobson said today.

"It's a milestone for us," he said. "Institutional investors are pretty focused on making money. For them to invest in us so strongly demonstrates faith in our growth strategy and vision."

Jacobson said the placement boosted the company's cash reserves to $15 million, and would assist the company in its licensing activities for its controversial non-coding DNA analysis and mapping patents, as well as fund GTG's new genetics testing facility and research projects.

Around 13 million shares will be issued at a price of $0.75 as a result of the oversubscribed placement, according to Mark Fordree, director of EG Capital. In addition, one option will be issued per two shares exercisable at $1 any time before the end of September 2005, potentially raising another $6.5 million for the company.

GTG recently named Dr Adrian Hodgson, formerly CEO of Vectogen, as director of science. The company is also in the process of establishing a scientific advisory board.

And a fourth provider of genetic testing services, US-based Quest Diagnostics, was granted a licence to use GTG's patents last week, paying both an undisclosed upfront signing fee and ongoing annual payments fro services provided in Canada, USA and Mexico.

At the time of writing GTG's price had risen 5.5 per cent to $0.77.