Molecular testing firm in bid to raise £10.5m through new shares
Genedrive, the Manchester-based molecular testing business, is aiming to raise £10.5m through the issue of new shares.
A placing has today (September 10) generated £6m, or £5.6m after expenses, while an open offer to qualifying shareholders will raise a further £4.5m. This is not being underwritten, meaning if there is no take up, no extra cash will be forthcoming.
The fundraising is being undertaken at an issue price of 25p per share, which represents a discount of approximately 40.1% to the closing price on September 9, 2021.
The company says the net proceeds of the fundraising, and its existing cash resources, will be directed towards two near-term revenue opportunities, being the final development of its COV19 ID testing kit, and supporting the commercial roll out of its antibiotic-induced hearing loss (AIHL) test, Genedrive MT-RNR1 ID Kit.
Funds will also be used to cover the group’s other product development, commercialisation and general corporate costs until the two tests are expected to be able to support the group’s overheads.
Peel Hunt and finnCap acted as joint bookrunners, and Peel Hunt acted as nominated adviser, in connection with the placing.
Genedrive estimates that the marked for its AIHL technology could be worth £5m a year in the UK, and another £30m across Europe. In terms of the US opportunity, that market is estimated to have a market opportunity in excess of £20m per annum.
The company’s COVID-19 test kit detects the presence of the virus in a nasal swab and positive samples are detected as quickly as 10 minutes, with a negative result reported after 20 minutes if no signal is detected.
Genedrive expects demand will emerge in areas like urgent need to travel, work places with risk of transmission is high, eg care homes, elite sports, cruise ships and emergency care. It believes it can achieve a transfer price of £20-30 per test and around £2,000 for the test units.
The AIM-listed company issued its interim results on March 25, 2021. Unaudited revenues to June 30, 2021 are £0.7m, and the estimated loss for the year is £0.8m after a tax credit of £1.2m and finance income of £3.5m as a result of a gain on the conversion of loan notes.
The company’s unaudited cash positions at June 30, 2021 and August 20, 2021 were £2.6m and £1.9m, respectively, indicating that the rate of cash burn indicated in the interim results has broadly been maintained.
Genedrive, therefore, estimates that, excluding any net proceeds of the fundraising it has a cash runway of around four months, from today (September 10).
