EBR Systems Announces A$50 Million Capital Raise to Support WiSE CRT System
EBR SYSTEMS INC. (EBR) Share Update September 2024 Tuesday 17th
EBR Systems Announces A$50 Million Capital Raise
EBR Systems, Inc. (ASX: EBR), the developer of the world's only wireless cardiac pacing device for heart failure, has announced a significant capital raise of A$50 million. This move aims to support the commercialisation and manufacturing scale-up of its novel WiSE® CRT system, anticipating U.S. FDA approval in early 2025.
Instant Summary:
- A$50 million capital raise to support commercialisation and manufacturing scale-up.
- Fully underwritten institutional placement and entitlement offer at A$0.82 per CDI.
- Targeting an initial US market opportunity of $US3.6 billion, pending FDA approval.
- Final PMA module for WiSE CRT system submitted to the U.S. FDA in August 2024.
- Post-raise, EBR will have a proforma cash balance of US$88.1 million.
Capital Raise Details
EBR Systems has announced a fully underwritten capital raise of A$50 million to support the commercialisation and manufacturing scale-up of its WiSE® CRT system. The capital raise comprises a fully underwritten institutional placement of approximately 45.6 million new CHESS Depositary Interests (New CDIs) at A$0.82 per CDI, raising approximately A$37.4 million. Additionally, a fully underwritten 1-for-20 accelerated non-renounceable pro-rata entitlement offer to existing securityholders aims to raise up to A$12.6 million at the same price.
The funds will be used to support commercialisation, manufacturing scale-up, research and development, and general administrative and working capital needs. The institutional placement is expected to be completed by 26 September 2024, while the retail entitlement offer will close on 9 October 2024.
FDA Approval and Market Opportunity
EBR Systems is preparing for a 2025 launch of its WiSE CRT system, targeting an initial US market opportunity of $US3.6 billion, pending FDA approval. In August 2024, the company completed and submitted its final PMA module for the WiSE CRT system to the U.S. FDA, having met all efficacy and safety endpoints in the pivotal SOLVE-CRT study.
The WiSE CRT system has received Breakthrough Device designation from the FDA, enabling prioritised review and interactive communication throughout the PMA process. This designation is expected to expedite the approval process, allowing EBR to execute its commercialisation strategy and drive initial adoption in high-volume US sites participating in the pivotal SOLVE-CRT clinical trial.
Financial and Market Impact
Following the completion of the capital raise, EBR Systems will have a proforma cash balance of US$88.1 million, providing a strong financial foundation for the company's growth and expansion plans. The offer price of A$0.82 per CDI represents a 15.9% discount to the last closing price of EBR's CDIs on 17 September 2024, and a 14.0% discount to the 5-day VWAP up to the same date.
The capital raise is fully underwritten by Bell Potter Securities Limited, Morgans Corporate Limited, and E&P Capital Pty Limited, with Wilsons Corporate Finance Limited acting as a joint lead manager.
The capital raise is expected to have a positive impact on EBR Systems' stock, as it provides the necessary funds to support the commercialisation and manufacturing scale-up of the WiSE CRT system. The anticipated FDA approval and subsequent market launch in 2025 could significantly boost the company's revenue and market presence. The discounted offer price may attract new investors, while the fully underwritten nature of the raise provides financial stability and confidence in the company's future prospects.
Investor Reaction:
Analysts are likely to view the capital raise positively, given the potential market opportunity and the progress towards FDA approval. The discounted offer price may be seen as an attractive entry point for new investors, while existing securityholders may appreciate the opportunity to participate in the entitlement offer. The fully underwritten nature of the raise further underscores the confidence of the joint lead managers in EBR Systems' growth potential.
Conclusion:
EBR Systems' A$50 million capital raise marks a significant step towards the commercialisation and manufacturing scale-up of its innovative WiSE CRT system. Investors should closely monitor the progress of the FDA approval process and the company's execution of its commercialisation strategy. With a strong financial foundation and a promising market opportunity, EBR Systems is well-positioned for future growth and success.