CBio Limited, an Australian-based drug development company, today announced the successful completion of a A$10 million capital raising ahead of a planned share market listing later in 2009. The capital raising was underwritten to A$6 million by financial services house Novus Capital Limited which acted as Financial Advisor and Underwriter and will be advising CBio in the IPO process.
Funds raised by the recent share placement and the IPO will be used to continue development of CBio’s drug therapy XToll, which is targeted to combat the chronic autoimmune disease rheumatoid arthritis. CBio has undertaken clinical trials with XToll in more than 150 patients and the company is now conducting a phase II clinical trial in patients suffering moderate to severe rheumatoid arthritis. These trials are due for completion in the first half of 2011.
XToll has been developed from intellectual property generated at the University of Queensland. The drug is protected by numerous patents and a Notice of Allowance covering the key US market where three major rheumatoid arthritis therapies generated sales in excess of US$10 billion in 2008.
Prior to and excluding this capital raising, CBio has spent A$47 million on the development of XToll, with these funds coming mainly from its existing shareholder base of sophisticated investors and smaller retail investors, as well as research grants. Many current investors have taken a keen interest in CBio since it was founded nine years ago.
CBio Executive Chairman Stephen Jones said the amount of capital required to continue development of XToll means that the IPO process will target professional fund managers, institutions, and the retail market. “The planned ASX listing is a strategic initiative that will enable CBio to access funding from sources previously unable to invest in the company,” Mr. Jones said.
“These funds will allow CBio to complete the development programme through to the end of the current clinical trial which, if successful, will be the most significant value inflection point for the company, and for shareholders,” he said. “Rheumatoid arthritis is a cruel disease. Joint destruction and pain inflicted can be so overwhelming as to severely affect quality of life,” Mr. Jones added.
“I believe we have something unique here with the potential to make a real and positive difference to the lives of many millions of people,” he said. CBio Managing Director Jason Yeates said successful results from the phase IIclinical trials are expected to lead to an agreement with a major pharmaceutical company for the commercialisation of XToll.
“We have an option agreement with Novo Nordisk, a top 20 global pharmaceutical company and world-leader in diabetes care, relating to the future development of XToll,” Mr. Yeates said. ”This strategic relationship not only validates CBio’s science and clinical development programme, but also presents an opportunity for a clear path for commercialisation,” he said.
XToll is being developed as a rheumatoid arthritis therapy, with 30% to 40% of patients failing to respond satisfactorily to current leading treatments. Safety issues also exist due to the potential side effects of these treatments. “The efficacy and safety profile of XToll, demonstrated in clinical trials completed to date, shows our product has the potential to match or outperform current therapies,” Mr. Yeates said.
“At this stage investors have the opportunity to invest in a company with a drug where significant development has already been completed, and therefore significant development risk already reduced,” he said.
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