Peptech joins in Domantis fundraising

Sydney-based Peptech (ASX:PTD) has invested more than AUD$10 million in Domantis, as part of a £17 million (AUD$39.5 million) capital raising by the UK drug development firm, which attracted two new significant shareholders.

Danish pharma Novo Nordisk and Mitsubishi subsidiary MC Life Science Ventures have joined existing investors to fund the ongoing clinical development of Domantis' 12 domain antibody (dAb) programs.

"We feel very positive about the capital raising," said Peptech executive chairman Mel Bridges. "Domantis continues to hit multiple milestones and is the next platform technology for dAb products."

Peptech, which had a 36.1 per cent stake in the company before the capital raising, contributed £4.6 million (AUD$10.7 million). Although Peptech remains the largest single shareholder in Domantis, its holding has dropped to 33.6 per cent.

"We would not have reduced our stake in the company unless there were quality investors on-board," Bridges said. "Domantis is planning to list on the Nasdaq in one to three years, and having cornerstone investors like Novo Nordisk and Mitsubishi really puts a stamp on the IPO."

"This financing achieves our objectives of securing four years' funding at a significant uplift in valuation while attracting prominent strategic investors," said Domantis CEO Robert Connelly in a statement. "Novo Nordisk is the leading biotechnology company in Europe and has a major commitment to developing novel biologics. Mitsubishi Corporation can assist Domantis in executing our commercial strategy in the Pacific Rim. Both companies undertook extensive due diligence prior to investing and their confidence and commitment is rewarding."

Earlier this month Domantis signed an agreement with global pharma Bristol-Myers Squibb to develop dAb therapeutics for multiple immunology and cancer targets. "There is still a lot more positive news to come in 2006 from both Domantis and Peptech," Bridges said.