Rhythm Biosciences Unveils New Placement Issue to Fund ColoSTAT Development
RHYTHM BIOSCIENCES LIMITED (RHY) Share Update November 2024 Monday 18th
Rhythm Biosciences Announces New Placement Issue for ColoSTAT Development
Rhythm Biosciences Limited (ASX: RHY) has announced a new placement issue aimed at raising $3.5 million to advance the development of its ColoSTAT cancer diagnostic technology.
Instant Summary:
- Rhythm Biosciences to issue 35 million new shares at $0.10 each.
- Funds to support ColoSTAT's development and regulatory preparations.
- ColoSTAT aims for commercialization in 2025 targeting a multi-billion dollar market.
Placement Issue Details
Rhythm Biosciences is set to issue 35 million new shares at a price of $0.10 per share, aiming to raise $3.5 million before expenses. This placement is part of the company's strategy to accelerate the development of ColoSTAT, a novel blood-based diagnostic test for colorectal cancer.
The new shares will be accompanied by additional options, with two new options for every three shares subscribed. These options will have an exercise price of $0.20 and are set to expire on March 31, 2026, pending shareholder approval.
Use of Funds
The funds raised will primarily be used to progress the development of the second-generation ColoSTAT assay. This includes completing the development and production of multiplex test kits in collaboration with a North American partner. Up to $0.70 million is allocated for this purpose.
Additionally, up to $1.20 million will be directed towards clinical validation and regulatory approval preparations. This involves serum sample collection and laboratory testing across various sites, along with developing materials for regulatory submissions.
Market Potential and Strategy
ColoSTAT is designed to detect colorectal cancer through a simple blood test, offering a less invasive alternative to traditional methods. It targets a significant market opportunity, as colorectal cancer screening participation rates remain low across major markets like the US, UK, Europe, and Australia.
Rhythm Biosciences aims to position ColoSTAT as a preferred screening option, with its ease of use and patient-friendly design. The company is also exploring further applications of its technology in other cancer diagnostics.
This placement issue is a strategic move to secure the necessary funding for advancing ColoSTAT towards commercialization. The successful development and launch of ColoSTAT could significantly enhance Rhythm Biosciences' market position, potentially driving up the company's stock value. However, the market reaction will depend on the company's ability to meet its development milestones and secure regulatory approvals.
Investor Reaction:
Analysts are likely to view this placement as a positive step towards achieving commercialization goals. However, investor sentiment may hinge on the company's progress in clinical validation and regulatory approvals.
Conclusion:
Investors should keep an eye on Rhythm Biosciences' upcoming milestones and regulatory submissions. The successful commercialization of ColoSTAT could open up substantial market opportunities and drive future growth.