RedHill BioPharma raises $38m in Nasdaq offering

drug development

The Israeli drug development company is raising $23 million from the public and $15 million from institutional investors.

Israeli drug developer RedHill Biopharma Ltd. (Nasdaq: RDHL); TASE: RDHL) raised $38 million yesterday in a Wall Street offering - $23 million in a public offering and a further $15 million to institutional investors. The offering was made at $10.25 per share, a 5% discount on the market price, and in the wake of the offering the company's share price lost 10%, giving a market cap of $124 million.

In early November, RedHill has tried to raise $25 million at $11 per share but had cancelled the offering due to low demand. Now the company has been able to raise a considerably higher sum, albeit at a slightly lower share price. Since the failed November offering, the company's share price has fallen 19%.

The underwriters for the offering were Echelon Wealth Partners in Canada and Roth Capital Partners in the US.

At the end of the third quarter RedHill Biopharma had $40 million, which would have lasted the company a further 18 months, so that obtaining the latest financing was not urgent. However, the company is currently conducting many clinical trials so that the need for cash was growing.

The company has also repeatedly said that it wants to increase its drug development portfolio through purchases and it might well be that it has conducted the offering now for this reason.

In 2017, the company is expecting intermediary results on a Krohn's disease treatment; Phase III trial results on a gastroenterology drug; Phase II trial results on a colon treatment; and is resubmitting an application for FDA marketing approval for a migraine treatment.

Published by Globes [online], Israel business news - www.globes-online.com - on December 22, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

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