Admedus Ltd (ASX:AHZ) has secured firm commitments for a oversubscribed $10 million private placement of ordinary shares to new institutional and existing and sophisticated investors at $0.33.
Admedus will also undertake a 1:9 renounceable rights issue to existing shareholders to raise up to a further $8.3 million.
Shareholders on the register at 5pm (WST) on 15 August 2016 will be entitled to participate in the rights issue.
The company is targeting sustainable profitability in FY18. Earlier in the month Admedus revealed that it had grown its FY16 sales to $14.1 million, up 40% on FY15 sales.
Wayne Paterson, chairman and interim CEO, commented:
“This capital raise will allow us to continue our current strong sales growth and roll-out additional products into the cardiovascular markets, whilst implementing our corporate strategy of tighter expenditure control.
"The completion of this capital raise, in addition to the implementation of our recent strategic review, removes any concerns about the finances of Admedus and places the company in a very strong position to achieve sustainable profitability for the 2018 financial year (if not before) and beyond.”
Allocation of funds
Admedus will use the funds raised from the placement and the rights issue for its corporate restructure, with the majority allocated for working capital.
In addition, funds will be used for the purposes of:
- Scale up of manufacturing to meet market demand;
- New product and IP development;
- New market expansion across emerging markets and new product ranges;
- Further investment and development in immunotherapy programmes in conjunction with Professor Ian Frazer; and
- Clinical and post market studies.
Admedus is developing multiple revenue streams and building a global healthcare company through CardioCel heart valve patch sales, infusion product sales and its immunotherapy programs.
Admedus' flagship product is CardioCel®, a bio-engineered tissue scaffold to repair congenital heart defects, and expanding into the heart valve market.
CardioCel is becoming a surgeon-preferred biomaterial for heart valve repair surgeries.
It represents a disruptive technology in the $2.5 billion heart valve repair and replacement market, which is dominated by products commercialized by large medical device companies.
It is now being sold in Canada, Australia, Asia, the Middle East, and North Africa, covering 135 medical centres.
The Admedus infusion portfolio has over 800 customers providing hospital-wide infusion solutions across the Australian and New Zealand healthcare systems.
Beyond CardioCel and infusion sales, Admedus is developing a DNA-based therapeutic vaccine for HSV-2 and HPV.
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