Australian biotech Novogen wants $30.5m from investors as it plans to enter a major growth phase and continues its successful cancer research.
AAP reports that the company has announced a $15.5m share placement to institutional investors. In addition, it is also offering one-for-six non-renounceable rights issue to existing shareholders with the aim of raising a further $15m.
Novogen stock plunged by 30 per cent yesterday. However, this follows significant surges in value earlier this year. In all, before the latest announcement, the company’s shares have gone up 277 per cent this year.
The rise is the result of successful cancer research. In one study, the experimental drug, Anisina killed melanoma cells irrespective of their mutational status.
The company explained in a statement that melanoma is associated with a variety of mutations, with those to the BRAF gene being the most prominent. A mutation to that gene occurs in about half of all melanoma patients and there are two drugs now available which can treat them.
However, as it stands, there is no drug to treat patients who have melanoma without the BRAF mutation. It is hoped Anisina could provide that treatment.
And in an earlier study, experimental anti-cancer drug from Novogen, Cantrixil, was found to kill human ovarian stem cells.
Human trials of Cantrixil are expected to start in late 2015, and the study will mainly target ovarian cancer and colorectal cancer.
Graham Kelly, Novogen Group CEO, said in a statement the company is now in a position to enter a major growth phase.
“Novogen has the opportunity to grow quickly into a significant drug discovery company. The further we take that opportunity as an independent company, the greater the shareholder value,” Kelly said.
“I believe that the Company has the intellectual property and the management expertise to achieve its goal of becoming a major player in the international biotechnology sector, and the fund-raising that we have announced today is key to that.”