Virax raises $3.4m

Development-stage biotechnology company Virax Holdings (ASX: VHL) has raised $3.4 million in a capital raising aimed to progress its prostate cancer and HIV drug development programs.

The specific use of the money will be determined by the outcome of Virax's United States search to secure licensing or partnership deals, with the results unlikely to be known until early next year.

The proceeds of the raising, amounting to $3.2 million after expenses, will significantly boost the Melbourne company's cash reserves, which sat at $436,000 at the end of the financial year.

Virax chairman Dr Tom Quirk said he was pleased by the level of support demonstrated through the capital raising, particularly with a number of new shareholders coming on board.

"I believe the key factors in the level of interest in the offer were the recognition of the increasing attractiveness of immunotherapeutics -- the area that Virax's Co-X-Gene technology platform focuses on -- and the merit of Virax's strategy in building international alliances," Quirk said.

"In addition, the success of the capital raising reflects the renewed interest of investors in the biotechnology sector as a whole."

Development contributes to loss

Virax's preliminary final report showed a net loss for the company of $3.1 million, up 16 per cent on the previous year. It also showed a 29 per cent slide in revenues from ordinary activities to $383,000.

In a statement, Virax said the loss reflected the costs of conducting early-stage biotechnology drug development, with the reduced revenue attributable to the lower amount received in the past year as part of an AusIndustry R&D Start grant.

The report said that, as well as the capital raising, the company was involved in seeking collaborative partnering activities and was looking for commercial opportunities to make use of Virax's facilities and capability to construct vectors and manufacture trial drugs.

It also said the company was awaiting the result of its VIR201 HIV therapeutic extension trial to assess the viability of the drug as an independent therapy. If the Virax drug proves successful it could mean patients would no longer be required to take anti-retroviral medications concurrently.

At the time of writing, Virax shares had slipped about 7 per cent to trade at just below 20 cents each on volumes topping 250,000.