Pre-natal diagnostic technology maker Premaitha Health (NIPT:AIM) has come back to investors for more cash, almost exactly a year after its AIM IPO on 4 July 2014. The company has clear ideas about where it plans to spend the hoped-for £8 million cash injection, refining its its IONA product but also to accelerate sales growth.
IONA screens foetuses in the womb for genetic abnormalities, such as Down’s syndrome, by analysing proteins in an expectant mother’s blood. The company believes it is more accurate than existing devices therefore reducing the number of false positive results, avoiding the need for further testing.
Premaitha is hoping to find a home for 40 million new shares priced at 20p each. That the shares have slumped 13.2% to 20.5p today is a reflection of the fund raisings 15%-odd discount to Wednesday’s 23.6p closing price. Yet in the context of Premaitha's £7.2 million flotation fund raise at 11p per share, investors should feel comfortable about supporting the move.
But there is the possibility that the market is a little nervous too about accusations of patent infringement levelled at the company by US firm Illumina (ILMN:NDQ) in May. The UK company has launched a stern defence with the UK High Court, CEO Dr Stephen Little saying at the time:
'We have looked at the legal position very carefully and, in our view, the claims are without substance.'
But the company admits today that some of the new cash raised will be used to 'respond to distracting litigation.' How much is impossible to say, but lawsuits do have a habit of dragging on, so a little market concern seems reasonable until the highly paid lawyers have settled the dispute.
An update on the cash call is expected later today, a speedy outcome that suggests this has been relatively easy to get away.