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Imugene to raise $20m, fund trials at Ohio State University, Mayo Clinic

Cancer vaccine hopeful Imugene is seeking to raise $20 million in fresh funds earmarked for the acquisition of IP and the development of clinical programs over the next three years at Ohio State University and the prestigious Minnesota-based Mayo Clinic.

It appears that investors are backing Imugene executive chairman and top-five shareholder Paul Hopper, who recently penned a $500 million deal between global pharmaceutical giant Merck & Co and Viralytics (where he is also chairman) to secure its immunotherapy cancer drug.

The purchase the US technology and patents by Imugene will make it the dominant B-Cell platform globally. B-Cells are cells in the human body that naturally produce millions of antibodies. Imugene's lead product is HER-Vaxx, a B-Cell peptide vaccine for the treatment of gastric cancer. It uses the body's own immune system to produce antibodies to fight cancers as opposed to the current approach which uses synthetic antibodies made in labs.

The Melbourne-based company's shares were placed in trading halt on June 5, pending a transaction and capital raising.

Imugene, with the help of lead manager Bell Potter Securities, is selling new shares at 2.7¢ each to raise up to $20 million – the second biggest biotech capital raising this year.

The offer was priced at a 10 per cent discount to the last close of 3¢, according to terms sent to potential investors. It consisted of a 1 for 9.5 non-renounceable rights issue of new shares at 2.7¢ per share to raise $8.1 million from existing shareholders, and a $12 million placement to institutional investors at 2.7¢ per share with one new option for every three new shares issued. The company had a $85.6 million market capitalisation prior to the offer.

Strengthens pipeline

Imugene will have trials now running in the key US market, an important milestone, given it only has HER-Vaxx gastric cancer trials running in Asia. It also expands its pipeline of potential immunotherapies.
Imugene chief executive Leslie Chong called the aquisition from Ohio State and the Mayo Clinic "transformative".

"This strengthens our B-Cell cancer vaccine pipeline," she said. "This is an acquisition of well advanced technology. It gives us a broad opportunity for several cancer indications and we are able to compete in the checkpoint inhibitors space, such as immuno-oncology drugs Keytruda and Opdivo."

Imugene is already in partnership with the Medical University of Vienna, where the pair are working to discover and develop mimotope-based immunotherapies to fight cancers.

The company is backed by Kerr Neilson's Platinum Asset Management.

High-profile international medical supporters include Axel Hoos, best known for his leading role to develop the successful melanoma drug Yervoy. Dr Hoos is on the Imugene board and is also head of oncology and immuno-oncology at global drug giant GlaxoSmithKline.

The placement had strong demand from new and existing shareholders, with several new US, Asian and European institutions joining the register. The entitlement offer is underwritten by Bell Potter. Aurenda Partners acted as co-manager while Roth Capital Partners was the US placement agent.