Radiopharm Theranostics’ (ASX: RAD) stock rocketed up more than 35 per cent this morning after the cancer-fighting firm secured commitments from leading international and Australian institutional investors to raise $70 million at a premium to its most recent share price.
Management plans to use the funds to advance its clinical programs for the diagnosis and treatment of cancer through its innovative radiopharmaceutical products. The cash injection is expected to fully support the company’s works through to the end of 2026, including drug manufacturing and a host of clinical trials.
The news triggered a share price jump from an overnight close of 3.4c to a high of 4.6c on the medical technology company’s biggest intraday trading volumes since its early days after listing in 2021.
The capital raise includes a recently-announced $7.5 million equity investment from American radiopharmaceutical industry leader, Lantheus Holdings, which will be issued nearly 150 million Radiopharm shares at 5c each – representing a 47 per cent premium to the last closing price. The $18.41 million market-capped Radiopharm is also tapping institutional and sophisticated investors to raise a further $62.5 million via a two-stage placement at 4c per share, equating to an 18 per cent premium on the last closing price.
Nearly $24 million of the shares are due to be issued at the start of next month under the first stage of the placement. The remaining $38.6 million package will come in the second stage of the placement, which requires approval at an extraordinary general meeting that is pencilled in for early August.
Investors participating in the placement will also receive one attaching option for every two new shares issued, with an exercise price of 6c and an expiry date that is two years from the settlement of the second stage of the placement.
Notably, Radiopharm’s founder and executive chair, Paul Hopper, is putting his money where his mouth is by pledging a $3 million investment through the placement, subject to shareholder approval. Other company directors have also signalled an intention to participate in the capital raise.
We are delighted to complete this significant capital raise, which will allow us to accelerate the development of our portfolio, as well as provide an expected cash runway to the end of 2026. To have attracted investment from Lantheus, one of the radiopharmaceutical industry’s leading companies, is a solid endorsement of RAD’s potential.
Radiopharm Theranostics CEO and Managing Director Riccardo Canevari
On top of Lantheus’ initial $7.5 million investment, it will also enter an option agreement to inject up to an additional $7.5 million within six months of the subscription shares being issued and on the same terms. Under a separate transfer and development agreement, Radiopharm has also agreed to assign and sub-license two of its preclinical assets to Lantheus for a $3 million consideration.
The assets include a monoclonal antibody that targets “LRRC15”, which is a substance produced by aggressive cancer cells and cells in the surrounding micro-environment, but not healthy normal tissue. The antibody is unique in its ability to kill both the cancerous tumour and micro-environment cells that make up most of the mass of a solid tumour.
The second asset is a nanobody that targets a calcium signal transducer known as “TROP2”, which is expressed differentially in many cancers.
Lantheus chief executive officer Brian Markison said radiopharmaceutical theranostics were changing the way cancer is diagnosed and treated, but more work needed to be done with the assistance of Radiopharm’s preclinical oncology assets.
Radiopharmaceuticals could be the future for cancer treatment and Radiopharm’s progress on that front has caught the eye of Lantheus – a global leader in the development, manufacture and commercialisation of diagnostic and therapeutic radiopharmaceutical solutions, with a market capitalisation of more than US$5 billion (A$7.5 billion).
Radiopharm boasts a comprehensive pipeline of clinical works aimed at leading to better diagnosis and treatment of cancer cells through direct delivery of radiopharmaceutical products. And it now has a substantial funding package to back that mission for the next couple of years.
Is your ASX-listed company doing something interesting? Contact: office@bullsnbears.com.au