Gradipore raises $2.7m

Gradipore (ASX: GDP) has raised AUD$2.7 million in a placement of six million shares at $0.45 to institutional investors.

According to executive vice chairman John Manusu, the funds will be used to implement the recently restructured company's 200 day strategy to turn the business around.

"It was a small fundraising, it's not going to fundamentally change the business," he said yesterday. "The critical thing is that it says the market is willing to support the company."

According to Manusu, the aim of the 200 day map is to provide a "roadmap" which will be used by the company to demonstrate to the market that they are following through on their plans and not veering off the path.

It follows a series of changes to the executive and senior management of the company.

In essence, the company has been divided into three business units -- separations, gels and diagnostics. The latter will be evaluated to see whether it fits with the company's direction.

Manusu said the company had decided to focus on developing a therapeutic application for its separations technology, and would find a distributor for its laboratory scale BF400 instrument.

"We don't believe we can focus on the instrumentation business and therapeutics at the same time, so we will focus our efforts on our strengths," he said.

By the end of financial year 2004, he said, the company would have commenced work on the FDA application for its first therapeutic drug, likely to be a purified plasma component with orphan drug status. Along the way, steps would need to be taken to ensure a plasma supply for the drug, and the company would make a deal with a manufacturing partner, probably in the form of a joint venture.

In the gels division, Manusu said Prof David Solomon, who developed Gradipore's gel manufacturing technology, has been appointed as a consultant to identify and resolve the manufacturing issues that have plagued the company.

The plan is to turn the division around from being a loss maker to profitability, Manusu said. In addition, the company plans to expand its gels sales into new markets by entering into distribution agreements.

Yesterday, the shares rose to $0.56, from $0.51 prior to the placement. The company also announced plans to offer one bonus option with an exercise price of $0.50 per five shares held to be used by September 1, 2004.

"We expect that by September next year, we'll have a significantly higher share price," Manusu said.