UK investors double EQiTX war chest

Technology investment company EQiTX (ASX:EQX) has more than doubled its cash reserves with a successful AUD$2.7 million capital raising, raised mostly through investors in the United Kingdom.

The funds are earmarked for the progression of the company's Gingerol project to exploit potential drugs for pain and inflammation.

EQiTX chief executive Dr Noel Chambers said some of the money would also be used to fund a number of other opportunities being pursued in the area of human health therapeutics, particularly vaccines.

The latest raising takes the company's cash reserves to almost $4.8 million, and follows an April share placement, which earned EQiTX $1.4 million.

Chambers said the company's business model, which was to invest in technology and set it up within separate companies, required EQiTX to raise additional funds.

"This extra one was done based on opportunity and the fact the company was succeeding and moving forward," Chambers said. "It sets us up to make further investments."

About 89 per cent of the latest cash came from the UK where Chambers says EQiTX has some "serious investors".

"They are very interested in the company and the model and the time was right for them to invest," he said.

The cash was raised through a placement involving nine million new shares at 30 cents each.

The company's Gingerol project is run through its ZingoTX subsidiary, which holds the exclusive worldwide licence to exploit potential new drugs for pain and inflammation.

EQiTX is to invest a total of $2.4 million in ZingoTX over two years, subject to milestones, and will own a 58 per cent stake at the end of that period, with the balance to be held by The University of Sydney and TP Health Ltd.

The technology was developed at the University's School of Pharmacy where a team of researchers isolated and synthesised new active compounds from an extract of the plant, Zingiber officinale.

In the past year ZingoTX began the first stage of product development to refine and select lead compounds and also received patent protection over the Gingerol technology in the United States as well as in Australia.

The first milestone, which involves the selection of the lead compound, is expected to be completed by November.

In addition to Gingerol, EQiTX is still in negotiations with the CRC for Vaccine Technology over the commercialisation of a family of patents to develop human therapeutic and prophylactic vaccines.

EQiTX plans to establish a new subsidiary company that would hold 100 per cent of the rights to exploit the technology, which involve the administration of medicines through the nose.

The latest capital raising remains subject to EQiTX shareholder approval at the company's annual general meeting on November 19.

At the time of writing EQiTX was unchanged at 33 cents a share.