Psiron to raise $10.5m to buy licence, boost R&D

With plans for its anti-cancer virus therapy mapped out, Psiron (ASX:PSX) today lodged a prospectus for a non-renounceable rights issue to raise approximately $10.5 million at $0.20 a share.

Shareholders will be offered one new share for every two shares held.

CEO Julie Nutting is hopeful that the capital raising will provide enough funds to both pay the $5 million cash component of the purchase of the Virotarg licence, and to progress the research in the next year. This would include manufacturing the virus for the company's therapy, starting clinical trials in melanoma patients and lead candidate identification and proof of concept studies on other cancer types.

A team of 14 is working on the Virotarg technology in parallel streams across the different cancer groups at the University of Newcastle's Virology and Immunology Department. The cancers being studied include melanoma, breast, prostate, ovarian, colorectal and lymphoid cancers.

"The plan is to go out once, and not keep going back to the market," said CEO Julie Nutting. "All things going well, once we get into humans with a virus on melanoma, the project will go like a train."

The use of Virotarg therapy against melanoma involves infection with a strain of common cold virus, Coxsackievirus. The virus targets two molecules ICAM-1 (intercellular adhesion molecule 1) and DAF (decayaccelerating factor), which are more commonly expressed on the surface of cancer cells than on normal cells. Once the virus is internalised it uses the melanoma cell to act as a factory for production of thousands of new viruses, which are then released by the dying cancer cell.