Norwood Immunology to list in UK, raising $37 million

By Melissa Trudinger
Monday, 05 April, 2004

Norwood Abbey's UK subsidiary Norwood Immunology has revealed its plans to float on the London Stock Exchange's Alternative Investment Market (AIM) in May.

The company plans to raise up to £15 million (AUD$37 million) in the float, giving it an overall market capitalisation of £115 million (AUD$280 million).

The company has been given a pre-money valuation of £100 million (AUD$243 million) by KBC Peel Hunt, the nominated advisors for the float.

Norwood Abbey (ASX:NAL) currently holds 92 per cent of shares in Norwood Immunology, and expects to retain more than 75 per cent of the company following the listing.

A briefing note produced by KBC Peel Hunt, which cannot be distributed in Australia by either KBC or Norwood due to British regulatory constraints, said that Norwood was "a company differentiated from any other in the sector by its focus on immunology combined with the stage of development of its main product. We rarely see small biotechnology companies delivering opportunities for label extensions to larger pharmaceutical partners. With TAP Pharmaceutical Products... licensing the US rights to the immunology technology, Norwood Immunology Ltd has achieved an enviable risk-reward profile and the outlook is excellent."

"It's a pretty major step for us," said Norwood Immunology's CEO Richard Williams. He said the company would use the funds to support its clinical trial program for the GnRH analogues, which have been demonstrated by Monash scientist Richard Boyd to 'reboot' the immune system by regenerating the thymus gland.

Last year, Norwood signed a major agreement with TAP -- the US Market leader in GnRH drugs with Lupron Depot -- to commercialise the use of the drugs for this purpose.

Trials are already underway to examine the use of the drug in patients undergoing bone marrow transplants and in patients with HIV/AIDS, and Williams said more were in the works. "We're fairly heavily underway with the planning of the clinical trials program in the US -- we expect to have 3 or 4 trials underway by the end of the year," Williams said.

According to Williams, the funds raised in the float would last through to 2007, when on current projections, the company expects to see the cash start coming in.

Williams said the company was encouraged by the timing of the float, noting that while the IPO window was not expected to close, it was good to get it over with before the summer market slowdown. "The IPO market is OK at the moment -- it's the best it's been for the last two years, but not what I'd call fever pitch," he said.

The company now has to wait four weeks, under the UK market's regulations, before it can begin to formally market the placement to investors.

At the time of writing, the share price of Norwood Abbey had risen nearly 8 per cent to $1.25.

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