Ann: Phosphagenics $19.3 million Capital raising, page-48

Very. Disappointing. That was my reaction to yesterday’s capital raising announcement. Like most people, I had accepted that there would have to be a capital raising at some stage. But I had hoped for something later, something at a higher price, something with less dilution. Sadly, as KC pointed out, there are ASIC requirements to be met and time wasn’t on our side. I communicated my disappointment to the company. I'm sure I wasn't alone.

Although I initially struggled to see anything good in this announcement, I could eventually accept that there are some positives.

• The cloud of a looming capital raise will no longer be hanging over the share price.
• There has been demonstrated support for the company from both local and overseas institutional investors.
• Studies and trials won’t be held back by a lack of funding.
• POH’s bargaining position in deal negotiations is now strengthened.

While I wasn’t happy with the announcement, I don’t believe it should be interpreted as a sign that TPM topical tretinoin trial results are poor. As both Jev and KC have pointed out, that’s not the way the process works. We don’t know yet and the company doesn’t know yet. Hopefully we’ll know next month and hopefully it will be impressive.

Nor do I think the capital raise indicates that there is no pharma interest in the oxy patches. Shareholders have been told on several occasions that there is definite pharma interest. If Rosen were willing to accept a deal on paltry terms, I’m sure a deal could have been signed already. However, his job is to maximise the value of the deal. Unfortunately, waiting while studies/processes (other than Phase 2 clinical trials) that add value are completed, and accepting a capital raise at a less than stellar time are two frustrations we’re going to have to deal with to allow Rosen to do that job.