Telesso to raise $6.5m to fund acne drug trial

ASX shell company Telesso Technologies (ASX:TEO) has launched a $6.5 million capital raising to help support its plan of acquiring Mimetica and commercialising its trial-stage acne treatment.

Telesso in April announced a deal to acquire all of Mimetica in exchange for 63 million Telesso shares and another 3 million options. Once complete, Telesso will take on the Mimetica name.

The deal is contingent on the success of the capital raising, which is being conducted to support Mimetica’s planned phase II trials of MTC896, a topical acne treatment.

Unlike all other approved topical treatments on the market, MTC896 is designed to reduce excess sebum (oil) production. The treatment candidate has performed well in initial clinical trials.

The planned phase II trial will take place in the US and involve around 240 subjects with moderate to severe acne.

“There has been little innovation in acne treatment in the past decade and Mimetica’s product has the potential to become the new gold standard in this market,” Telesso Chairman Michael Hoy said.

The acquisition and IPO of Mimetica already has the support of Queensland Investment Corporation, which has pledged to invest $1.5 million under the offer. Starfish Ventures also recently invested $1.5 million in Mimetica.

If Telesso places all 26 million shares at the offer price of $0.25, the company will have a post-IPO market cap of $24.5 million.