Polartechnics secures commitment to raise $5m

Medical device company Polartechnics (ASX:PLT) today announced it had secured commitments to raise $5 million to assist in international marketing of its three core products.

The Sydney company has three products already in Australian clinics: cervical screening product TruScreen; video imaging and patient data management system MediScan; and the SolarScan skin microscopy system.

Executive chairman Tony Grey said the capital raising was intended to push the products into the international arena.

"TruScreen, SolarScan and MediScan are all global market products and require more marketing exposure and resources applied to them," Grey said. "In addition, because they are new, we want to be able to reduce manufacturing costs."

The company said it would raise approximately $5 million through the placement of about 6.4 million fully paid ordinary shares to existing and new investors at 78 cents per share.

Grey said the board had endorsed the fundraising as a "prudent, long-term strategy".

"The proceeds of the placement will allow Polartechnics to fund the expansion of its aggressive international sales and product marketing campaign," he said. "It will also provide funds for enhancing our products, based on customer feedback, and generate savings by reducing production costs."

In addition to the placement, Polartechnics will also offer existing shareholders the option of subscribing for up to $5000 worth of fully-paid ordinary shares at 78 cents each as part of a share purchase plan.

If fully subscribed, the combined initiatives could take the company's raisings to more than $10 million.

Last month, Polartechnics announced favourable results from a study of its TruScreen device as an adjunct to standard Pap smear tests.

The trial showed that the combined tests offered a 33 per cent increase in the detection of cervical abnormalities than with the Pap smear alone.

The findings are to be published in the International Journal of Gynaecological Cancer.

As well as being available in Australian clinics, the company has also sold TruScreen in New Zealand and Italy.

Grey also said that Polartechnics had recently received a $500,000 order from six Irish hospitals for its MediScan product. "We expect that to be a path-finder to other sales within Europe," Grey said.

At the time of writing, Polartechnics shares had slipped 9.6 per cent to trade at 85 cents.