Alchemia raises $14.6m, aims to add another $5m

Alchemia (ASX:ACL) has raised AUD$14.6 million through a share placement and will commence a share purchase plan (SPP) to offer an additional $5 million to existing shareholders.

Alchemia allocated 13.3 million fully paid ordinary shares through the placement which will be issued to institutional and sophisticated investors at $1.10 per share -- representing a 14 per cent discount to the five-day volume weighted average market price of $1.28 up to, and including, November 1.

Orbis Global Equity Fund has become a major shareholder through the placement with a purchase of over $6.7 million worth of shares (6.1 million shares).

"Quite a few of our existing institutional shareholders took the opportunity to take some additional stock as well," said Alchemia CEO Tracie Ramsdale.

Under the share purchase plan, eligible shareholders will be able to purchase up to $5000 worth of shares at the same placement price of $1.10. Depending on the level of uptake, up to 4.55 million shares may be issued.

Alchemia has roughly 2,000 shareholders, said Ramsdale, "so $5 million is expecting about half of the shareholders to take up the offer".

The funds raised will be used to accelerate Alchemia's drug discovery program, specifically to progress anti-cancer drug candidate ACL16907 from preclinical status to the completion of phase II clinical trials in 2008 and to advance an eye-disease candidate for age-related macular degeneration to the end of phase I clinical trials by 2007/08.

"It will also be used for the indentification of new preclinical candidates using our drug discovery platform," said Ramsdale.

ABN Amro Morgans is the sole lead manager of the capital raising.

Synthetic heparin

The pilot scale synthesis of the first batch of Alchemia's synthetic heparin has been completed at Dow's facility in Midland and the material will now undergo purification and quality assurance testing prior to release to the company's US marketing partner, American Pharmaceutical Partners (APP).

APP will then obtain regulatory approvals and coordinate the North American market launch which is expected in 2008.

"Synthetic heparin is fully funded all the way through to market," said Ramsdale, "so all of the funds raised are being used for drug discovery development programs."