Syntara Ltd Announces Two-Tranche Placement to Raise A$5 Million
SYNTARA LIMITED (SNT) Share Update July 2024 Tuesday 30th
Syntara Secures A$5 Million in Two-Tranche Placement
Clinical stage drug development company Syntara Ltd (ASX: SNT) has announced it has secured firm commitments to raise approximately A$5.0 million through a two-tranche institutional placement. This funding will provide certainty for the company's ongoing and planned Phase 2 clinical trials.
Instant Summary:
- Syntara raises A$5.0 million via a two-tranche placement at A$0.028 per share.
- Funds to support Phase 2 clinical trials for myelofibrosis, myelodysplastic syndrome, skin scarring, and iRBD/Parkinson’s disease.
- Syntara claims A$5.1 million from Arna Pharma Pty Ltd, the acquiror of its mannitol business unit.
- Post-deal cash balance expected to be approximately A$8.5 million.
- Expected 2024 R&D tax credit of A$3.6 million.
Funding Details
Syntara Ltd has received firm commitments from institutional and high net worth investors to raise approximately A$5.0 million through a two-tranche institutional placement. This placement involves the issuance of approximately 96.4 million fully paid ordinary shares at A$0.028 per share in Tranche 1, raising around A$2.7 million. Tranche 2 will see the issuance of approximately 82.1 million fully paid ordinary shares at the same price, raising an additional A$2.3 million.
Both tranches will be issued within the company's 15% placement capacity under ASX Listing Rule 7.1. Notably, Tranche 2 includes a A$1.5 million investment by KP Rx, a fund managed by a director of the company, which is subject to shareholder approval at a General Meeting expected in late August or early September 2024.
Usage of Funds
The funds raised will provide certainty of funding towards the completion of Syntara's Phase 2 clinical trials. These trials include studies on myelofibrosis (MF), myelodysplastic syndrome (MDS), skin scarring, and iRBD/Parkinson’s disease. The funds will also support general working capital purposes and cover capital raising costs.
Legal Challenges
The placement was necessitated by a recent challenge from Arna Pharma Pty Ltd, the acquiror of Syntara's mannitol business unit, regarding amounts claimed by Syntara under their agreement. Syntara is claiming approximately A$5.1 million from Arna Pharma. To address this challenge, Syntara has appointed external counsel to actively pursue legal remedies as necessary.
CEO Commentary
Gary Phillips, Syntara's Chief Executive Officer, commented, 'It has been an exciting period for the company as we rapidly closed in on our recruitment targets for the Phase 2 multinational study targeting MF, with 14 out of 15 patients now recruited. The last review of the data by the Safety Monitoring Committee resulted in a unanimous vote to continue the study. In addition, we completed the final stages of exit from the MBU, achieving anticipated cost savings of $14 million per annum.'
Phillips also expressed gratitude for the strong support from shareholders, ensuring the continuation of their active clinical trial programs despite the unexpected challenge from Arna Pharma.
The successful raising of A$5 million provides Syntara with the financial stability needed to continue its Phase 2 clinical trials. This funding is crucial for the company's progress in developing treatments for high unmet medical needs. The legal challenge from Arna Pharma introduces some uncertainty, but the strong cash position and expected tax credits should help mitigate potential risks. Overall, this announcement is likely to be viewed positively by investors, as it demonstrates Syntara's ability to secure funding and continue its clinical development programs.
Investor Reaction:
Analysts are likely to react positively to Syntara's successful capital raising, as it ensures the continuation of important clinical trials. However, the legal challenge from Arna Pharma may cause some concern among investors. The company's proactive approach in appointing external counsel to address this issue should help maintain investor confidence.
Conclusion:
Investors should monitor the progress of Syntara's Phase 2 clinical trials and the outcome of the legal challenge from Arna Pharma. The successful capital raising and strong cash position are positive indicators for the company's future. Staying informed about Syntara's developments will be crucial for making informed investment decisions.