C3 raises $10m

Perth-based Clinical Cell Culture (C3, ASX:CCE) has placed 28.6 million new fully paid ordinary shares worth AUD$10 million with Australian institutional and sophisticated investors.

The shares were issued at a price of $0.35 and the placement is being managed by eG Capital.

"The institutional demand, which is critical, was there," said eG Capital's Greg Ward. "A lot of institutions were happy to take the stock."

At June 30, C3 had cash reserves of $9.2 million but the company decided to capital raise to support the better than expected European market response to ReCell -- an autologous cell harvesting device used to treat wounds and other skin defects -- and the potential for further ReCell product enhancements including reusable and disposable versions, new variants of trypsin, the enzyme used in the ReCell process, and improved design of the spray head.

After the placement, C3 will have cash reserves of $18.2 million. The new funds will be used to accelerate the launch of ReCell in Europe, Japan and later this year in the Americas.

"It's not so much development, it's actually real product that they've got to start supplying to customers," said Ward. "Given the company is right on the verge of commercialisation, they're racking up sales, it really is just to build inventory."

CE Mark approval for ReCell was granted in March 2005 for Europe. "FDA and TGA product approval for ReCell is expected in the second half of 2005," said C3 managing director Troels Jordansen in a statement. "With this additional funding, C3 is well positioned for further growth in the first half of 2006."

The placement price of $0.35 represents a discount of 3.3 per cent to the three month volume weighted average price of $0.362 for C3 shares in the preceding three-month period.

At the time of writing, C3 shares were trading at $0.375.