Viralytics to raise up to $27m for cancer trials

Viralytics (ASX:VLA) will raise up to $27.1 million through a placement and entitlement offer to fund clinical trials for its Cavatak cancer treatment candidate.

The company will, subject to shareholder approval, issue $23 million worth of shares to professional investors in a two-tranche placement. Up to a further $4.1 million will be raised via a 1-for-6 entitlement offer for existing shareholders.

Both the placement and entitlement offer have a price of $0.28 per share, a 12.5% discount to the company’s volume weighted average trading price for the 15 days prior to the announcement of the offer.

Viralytics said it expects the proceeds of the capital raising will allow it to complete its Cavatak clinical trials program. These include the ongoing CALM trial in late-stage melanoma and the phase I/II trial in solid tumours due to commence next month.

Viralytics reached its 54-patient recruitment target for the phase II CALM trial this month. It is being conducted across 11 US cancer clinics.

“This capital raising is transformational for the company as it introduces several high-quality international institutional investors to the register for the first time,” Viralytics CEO Dr Malcolm McColl said. “We can now more rapidly advance the program and will be in a strong financial position to negotiate with pharmaceutical partners and optimise commercial outcomes.”

With the capital raising, the company expects to be fully funded through to the end of 2016.

Viralytics (ASX:VLA) shares were trading 6.25% lower at $0.30 as of around 2 pm on Thursday.