It didn't look good at first as straight away I saw 0.006 and wasn't happy. Took me a while to get over that! Here's some bad and good points from today's 2 announcements I was thinking about today, and then a comparison with another ASX biotech that was in a similar position to DXB 12 months ago.
Bad points:
- Still can't figure out why they raised capital now when they may be able to raise at a higher level over the next 6 months or so. Maybe they can't be taken seriously overseas with less than $1m cash?
- 0.006 is a low price compared to where it spiked 6 months ago but still reasonable given wwap over the last month or so.
- No mention of a cornerstone investor taking up any of the 333m shares, but we may see a s.603 or s.604 notice soon after 4th Feb – would need someone to breach about 90m shares (5%) for this to happen. May also see a change of sub holder which will show whether the 2 big guys put money in or were diluted from not doing so.
- So important whether the 333m shares have gone to holders in for the long haul or those happy to sell at 0.007, 0.008, 0.009 etc for a quick profit. Dimerix only traded about 700m shares for the whole of the last 12 months so will be hard to get through 333m shares!
Good points:
- 333m shares is not too much dilution compared to what the NDF research report was suggesting which was 1 billion shares at 1c. I don't believe currently there is much extra the company can do with $10m than it could do with $3m, so a good result imo. NDF research report target prices need to be updated to reflect this raise.
- The preso to investors mentions 1.5-2m to be raised so they have clearly had interest at the higher level (also confirmed in the 1st annc today).
- Once the dust settles Dimerix will be in a much better position with enough cash for people to forget about any more cap raisings in the short term.
- Importantly, todays preso shows the top holders have not sold any shares in the period from October except for J&L Peterson who look like they’ve sold just 3m shares.
- Todays preso highlighted that the interim update showed strong evidence of safety and likely efficacy.
- Also some new statements in the preso re opportunities for big pharma deals (Chemocentryx – Dec 2016)
- Something I hadn’t noticed before, very interestingly Dimerix own patent #….450 which seems to cover the very drug that Chemocentryx is developing. I am gonna check this to confirm.
What is everyone else thinking?
I had a look back at Innates history over the last 12 months and couldn't help notice some similarities between Dimerix and where Innate was 12 months ago. Here's the 2 presentations, Innates is from April 2016:
Yes they are obviously targeting different disease groups but some key similarities are:
- Both companies targeting an unmet need
- Innate started from a low market cap, Dimerix is low now.
- Innate had around $3m cash at March 2016 prior to the share price taking off, DXB will have around $2.7m at Feb
- Similar potential annual market revenue being targeted - DXB US$3-5b, Innate - US$4b
- Both in phase 2, with strong recruitment patient interest
- "Strong evidence of safety and likely efficacy" – both presentations state this exact phrase
- Major pharma involved early for both companies
- Both with strong intellectual property focus
- Similar shareholder structure in both, – 1 major shareholder holding over 20% and top 20 shareholders holding just over 50%
Anyway, finally this was a new part of the presentation today that I thought was very important, worth taking note of:
DXB Price at posting:
0.7¢ Sentiment: Hold Disclosure: Held
(20min delay)