News: Regeneus closes $3M private placement

Regeneus (ASX:RGS) has completed a fully subscribed $3 million private placement to help accelerate development of its cancer vaccines as well as off-the-shelf stem cell therapy for human osteoarthritis.

The placement to institutional and sophisticated investors was priced at $0.26 and includes one free attaching option exercisable at $0.40 each that expire 12 months from the issue date for every three shares issued.

Notably, chairman John Martin and chief executive officer Professor Graham Vesey have aligned themselves with shareholders by subscribing for a total of $200,000 worth of shares.

Approval for the issued of shares to Martin and Vesey will be sought at the company’s Annual General Meeting in October.

Further funding of up to $3 million will be raised through a share purchase plan priced at $0.26 per shares. No options will be attached to the share purchase plan.

The placement and SPP will add to the company’s cash reserves of $2.5 million as of 30 June 2014 and a research and development tax rebate of about $3.3 million expected in late September 2014.

Use of Funds

Proceeds from the placement and the SPP will be used to accelerate development for its personalised human and canine cancer vaccines as well as off-the-shelf stem cell therapy for human osteoarthritis.
   
Specifically, the funds will be used as follows:

Human Health
-    HiQCell – market development including Singapore: $0.9 million;
-    Progenza – pre-clinical and first-in-man trial: $1.8 million;
-    Human Cancer Vaccine – pre-clinical and first-in-man trial: $1.6 million;
Veterinary Health
-    Canine Cancer Vaccine – marketing trials and early commercialisation activities in U.S. and Australia: $0.8 million;

A further $0.65 million will be spent on research and development and $0.25 million on transaction costs.

Analysis

That institutional and sophisticated investors have fully subscribed for Regeneus’ $3 million private placement highlights the confidence in the company and its ability to commercialise its regenerative therapies that use the patient's own tumour cells and stem cells to treat cancer and musculoskeletal conditions, such as osteoarthritis.

Its executives have also demonstrated their belief in the company with chairman John Martin and chief executive officer Professor Graham Vesey subscribing for a total of $200,000 worth of shares.

There are significant share price catalysts ahead given the strong product pipeline, with initiatives for HiQCell treatments to increase; the cell manufacture for pre-clinical study for off-the-shelf stem cell therapy to commence and progress made on stem cell cream.

Its therapeutic cancer vaccine also has the potential target a wide range of hard to treat cancers with a single product while its veterinary health products are also gaining momentum.

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