Admedus Ltd (ASX:AHZ) has successfully completed their $8.3 million rights issue which followed the $10 million placement completed earlier in the month.
The healthcare company 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 is focused on continued growth of sales and is expecting at least a 50% growth in revenue in the 2017 financial year.
Funds raised will be used to make improvements to the manufacturing division, expand the regenerative tissue range, refine the research and development portfolio and fund new market expansion.
Wayne Paterson, CEO, commented: “This places the company in a strong financial position as we pursue growth objectives.”
Admedus closed its 1:9 fully underwritten rights issue to raise $8.3 million priced at $0.33 on August 29, 2016.
Applications from shareholders for the rights issue were received for $5.7 million, with the balance being placed by the underwriter.
The rights issue follows the recently completed placement of $10 million, also priced at $0.33.
The total raised under the placement and underwritten rights issue is $18.3 million.
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.
Admedus remain on track to launch their new vascular product, VascuCel, in November 2016.
VascuCel is used in the repair of vascular surgical procedures.
The vascular repair market is worth US$500 million per annum.
The Perth based factory will be ready to supply VascuCel alongside its current output of
CardioCel by November 1, 2016.
New CFO and Brisbane relocation
Admedus recently appointed Mark Ziirsen as chief financial officer as the company relocates its corporate services functions to Brisbane.
Ziirsen joins Admedus from Cochlear Ltd (ASX:COH), where he held the role of director of finance and I.T. for Asia Pacific for the past five years.
Ziirsen will take over from current CFO and company secretary Stephen Mann, who is based in Perth. He will continue to work with Admedus through this transition until the end of the year.
With the capital raising complete, Admedus is in a strong financial position to drive growth and sales this financial year.
The restructure that occurred in June shows that Admedus is committed to reduce costs and focus on near-term revenue growth to create a clear path to being a sustainable, profitable, global healthcare company.
The stock is trading at around A$0.345, which represents a large discount to its broker price targets of A$1.48, A$1.95 and A$2.00.
New York based Maxim Group recently maintained their buy recommendation on the company and $2.00 price target.
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