Tissue Therapies raises $1.6m, announces SPP

Brisbane biotech Tissue Therapies (ASX:TIS) has completed a placement to investors, raising AUD$1.6 million before costs.

The placement of over 2.3 million new ordinary shares at $0.70 per share represents an additional 14.98 per cent of the company's existing issued capital.

Tissue Therapies CEO Steven Mercer said that the placement was "somewhat oversubscribed" and while brokers had suggested that the company aim for $2 million, he said that the company did not need to at the moment.

"The company has always run very skinny, deliberately," said Mercer. "When we see what the market thinks of us, they usually like to give us more money than we actually need.

"The whole listed biotech sector has certainly been under pressure this year, but I also think that the market rewards good performance and we have benefited from that," he said.

The funds raised will be used for preclinical and clinical trials for burns and diabetic ulcers and to establish a small GMP-licensed manufacturing facility for the production of VitroGro, the company's wound-healing technology.

The placement was managed by ABN Amro Morgans and included sophisticated investor clients of sharebrokers Taylor Collison. Settlement is scheduled for November 22.

Share purchase plan

Eligible shareholders will also be able to purchase shares at the same price of $0.70 per share -- a 17.42 per cent discount to the volume-weighted average price of $0.85 for the past five trading days.

Mercer said the company is hoping to raise the same amount from the share purchase plan (SPP) as was raised in the placement. At present the company has roughly 800 shareholders, he said. The funds from the placement, SPP and existing cash resources are expected to fund the Tissue Therapies' operations into the latter half of 2007.

The share purchase plan closes on December 16. Tissue Therapies shares were trading at $0.80 at the time of writing, down $0.08 since the market opened this morning.

BresaGen SPP

Adelaide-based BresaGen (ASX:BGN) has also announced a SPP intended to raise up to $3.8 million. Eligible shareholders will be able to purchase up to $5,000 of ordinary shares at a price of $0.10 per share, free of brokerage and other transaction costs.

The funds raised will provide BresaGen with working capital for development and production to inventory of new API products, the start up of its aseptic vial filling facility and a mammalian cell GMP facility.

The SPP closes on February 10, 2006. BresaGen's shares were steady at $0.115 at the time of writing.