Starpharma raises $15m

Melbourne drug developer Starpharma (ASX:SPL) has successfully raised AUD$12 million through an institutional placement at $0.51 and an additional $3 million following an underwritten share purchase plan.

"We wanted to make sure that we had enough money for two years of operation. We now have real stability with $20 million in the bank," said Starpharma CEO John Raff. "It gives us plenty of time to get income into the company before we need to go back to market."

Last month Starpharma also received a US$20.3 million (AUD$26.4 million) grant from the US National Institutes of Health (NIH), to develop VivaGel as a preventative for HIV infection.

"VivaGel for the prevention of HIV is fully funded externally," Raff said. "The new capital will be used to fund the development of line extensions of VivaGel to include the prevention of genital herpes. We also plan to further build our dendrimer nanotechnology product pipeline and increase our activities with [US-based] Dendritic NanoTechnologies, which we own 33 per cent of.

"Some of the key institutions have reinvested and we have five new institutions on the register. It is good to have that mixture -- it shows that they are really opening up to fund biotech," he said.

The institutional placement, which closed last Friday, was oversubscribed. The SPP, also priced at $0.51, is expected to run from 22 November to 15 December. Patersons Securities acted as the lead manager of the placement and underwriter of the SPP.