Rights issue to fund Analytica's new biotech strategy

A $1.3 million rights issue by Analytica Ltd will test investor attitudes toward young biotechs who ask shareholders for a second chance after crashing on the first attempt.

The fully underwritten issue is supported by Analytica's major shareholder, therapeutics and intellectual property portfolio company Psiron.

Analytica raised $7 million to $10 million in a public float in 2000 but lost its way and underwent sweeping restructuring and management changes late last year following the trading suspension of its shares on the ASX.

Its shareholders emerged from the exercise with one share in the restructured company for every 10 original shares.

The new one-for-one rights issue of 26.6 million shares is priced at five cents a share with a one-cent discount for shareowners who use the issue to bring their holdings up to 25,000 shares.

Scheduled to close July 17, the rights is a conservatively-structured exercise. It will reveal whether shareholders burned in the first incarnation of Analytica feel charitable enough to give its new management and business strategies a chance to prove themselves.

As part of last year's restructuring, Psiron Ltd sold its medial diagnostics business into Analytica and acquired the IP in Analytica's sPLA2 anti-inflammatory project. The deal injected $800,000 into Analytica while giving Psiron a 60 per cent stake in the company.

Psiron will take up 11 million shares of the rights issue of which five million will be offered to Psiron shareholders at the five cent price. At the close of the exercise, Psiron's current 60 per cent of Analytica should be reduced to just over 50 per cent.

The rights issue is being underwritten by Australian Technology Innovation Fund.