After this summer’s rights issue, Lund-based Arcede Pharma is now ready to continue work on the drug candidate RCD405. The issue was subscribed to approximately 72 per cent, which means that the company now has enough funds to continue development at an even pace. At the same time, the majority of the guarantors chose payment in newly subscribed units, a sign that they have great confidence in the company’s future. BioStock reached out to CEO Mia Lundblad to hear her thoughts on the outcome of the rights issue.
Arcede Pharma develops the drug candidate RCD405, which is intended for the treatment of patients suffering from COPD and severe asthma. The company is currently awaiting results from the final toxicology study, that evaluates the drug candidate’s safety profile. If nothing unexpected is found in those results, the next step will be to take RCD405 to clinical trials.
Announces outcome in rights issue
To be able to continue the development towards the clinic, the company has had a need for a capital injection, which led to the rights issue of units that was carried out at the end of the summer. In total, the issue was subscribed to 72 per cent, which means that Arcede will initially receive approximately 9.2 MSEK, before issue costs.
The outcome can be seen as good considering the challenging situation on the capital raise market.
The majority of guarantors choose units
The issue consisted of subscription commitments, declarations of intent and guarantee commitments amounting to a total of 5.9 MSEK. Of that total, 1 MSEK consisted of a so-called top guarantee. As the company received a total of 9.2 MSEK, no issue guarantees needed to be utilised.
The guarantors then had the opportunity to choose between cash compensation and units as compensation. A total of seven guarantors chose the latter alternative, which led to a compensation issue of a total of just over 7.1 million units. Each unit was issued at a subscription price of 0.09 SEK per unit, which was the same subscription price that was applied in the main issue. The guarantors who chose cash compensation instead will be compensated with a total of 210,000 SEK.
Can add just over 9 MSEK in early 2024
Each unit in the rights issue contained one share and one warrant of series TO 1. The warrants entitle the holder to subscribe for one new share in the company in January 2024, at a subscription price of 0.09 SEK. This next step in the capital raise can provide an additional total of approximately 9.2 million SEK, an important contribution towards the continued development.
BioStock spoke to Arcede Pharma’s CEO Mia Lundblad to get her thoughts on the completed capital raise.
First of all, Mia, how do you view the subscription rate that you achieved in the issue, given the difficult situation in the capital market?
– This is very positive given the generally difficult stock market climate and the macroeconomic situation right now.
What does this outcome mean for the continued development?
– With this, we can prioritise the start of most of the studies that we consider to be important and necessary for the continued development.
What do you think about the fact that the majority of guarantors chose payment in units?
– This is also of course positive for the company as it gives us greater financial resources than if the payment had been made in cash.
You are awaiting the results of the last part of your tox programme. What is happening at the same time in terms of development?
– We are investigating the dose/concentration-effect relationship and conducting further studies regarding the mechanism of action. With the help of these results, we can make a better estimation and prediction of the doses needed to achieve effective clinical concentrations in humans.The content of BioStock’s news and analyses is independent but the work of BioStock is to a certain degree financed by life science companies. The above article concerns a company from which BioStock has received financing.