patersons placement in peril?

The market doesn't like aspects of the Virax/Hopper drug deal announced on St Patricks' Day.

That's a key conclusion to be drawn from a 35pc fall in the VHL share price from $0.017c on March 17 to $0.011 yesterday.

The current price of $0.011 is 8.3pc below the $0.012 price set for the $3m placement to clients of Paterson Securities.

Announced on March 24, the placement is aimed at partly funding the trialling of GGTI-2418, a multiple myeloma/breast cancer drug introduced to VHL by Paul Hopper.

Hopper is a former director of Somnomed (SOM), Isonea (ISN) and pSivida (PVA).

He is chairman of Viralytics (VLA) and Immugene (IMU), both of which are addressing cancer spaces.

Hopper's recently formed Pathway Oncology Pty Ltd has acquired rights to GGTI-2418 from unidentified entities on undisclosed terms.

As posted, a Phase 1a trial of GGTI-2418 under the leadership of Professor Peter O'Dwyer of the University of Pennsylvania was terminated 2009 when the drug was licensed to Florida-based Tigris Pharmaceuticals, now Kirax Corp.

Question: Why was the trial terminated?

The Hopper deal - and the placement - will be placed before Virax shareholders at an EGM set for May 1.

If shareholders approve the deal, Hopper will become chief VHL shareholder, easily outranking Westoz Investment Co (ASX:WIC) and VHL chairman, Dr Wayne Millen.

Question: Why would Paterson clients subscribe to a placement when the placement price is materially above the market price?