Upgrades are on the way for drug re-developer Oxford Pharmascience (OXP:AIM) as it raises £20 million to hone its pipeline.
The £115.6 million cap sold 200 million shares at 10p each to institutions. The stock only falls 3.1% to 11.5p following the deal, despite the shares selling for a near 16% discount to Monday’s closing price.
Oxford initially targeted £5 million, but demand was high with investors backing the company’s story of taking approved drugs and removing their side effects or making them easier to take.
Shares can reveal that around half the shares were bought by star fund manager Neil Woodford, who topped up his existing stake in the business to more than 30%. While going over the 30%-mark this would normally spark a mandatory bid for the entire business, although the investment expert has applied for a waiver from this obligation.
The proceeds will be used to develop Oxford’s pipeline and investigate new therapeutic uses for its technology. The cash will also strengthen its hand during commercial negotiations.
The deal is conditional on a shareholder vote on 24 June, when analysts at broker N+1 Singer say they will update their forecasts.
The main beneficially of the placing will be Oxford’s OXPzero Aspirin painkiller for cardiovascular disease sufferers, which is being designed to reduce gastric irritation while removing its taste. Alongside development, money will be spent on manufacturing and clinical trials.
Developing its statin product is also on the agenda, while a version of an ibuprofen tablet is expected to generate clinical proof of reducing gastric irritation this year.
