4D Pharma (DDDD) announced on Tuesday it plans to raise £18 million to support its ongoing clinical studies.
The AIM-listed pharmaceutical company said the funds would be used to progress its studies on Irritable Bowel Syndrome (IBS), oncology, asthma as well as for general corporate purposes.
The company revealed plans to issue 36 million new shares priced at 50p per share, in an accelerated Bookbuild run by N+1 Singer and Bryan Garnier.
Duncan Peyton, CEO of 4D pharma said: "4D pharma is pleased to launch this funding round - its first since 2015 and in challenging market conditions for developers of new therapeutics - with strong support from existing and new investors, including our partner MSD and other US investors in addition to those in the UK.”
Shares in 4D Pharma were trading 22% lower at 53.75p during Tuesday morning trading
4D Pharma, which is focused on developing live biotherapeutic products (LBPs), said the funds would enable it to continue operations to at least two clinical study readouts.
Depending on the data from the studies, 4D Pharma said it believes they will provide a ‘material validation’ for its approach to developing LBPs, and serve as ‘value accretive events’ for investors.
Mr. Peyton said: “This funding will enable us to reach important milestone data points in two clinical studies which we believe will represent material value inflection points as positive data, if generated, will provide strong further validation of our approach to developing live biotherapeutics."
The Issue price of 50p represented a 27.8% discount to 4D Pharma’s Monday closing price of 69.25p.
4D Pharma also revealed that it exercised its right to cause Merck & Co to purchase about $5 million in new shares.
Certain Directors of 4D Pharma also indicated their intention to subscribe for £2 million worth of shares as part of the fundraise.
For every 2 shares subscribed to in the placing, 4D Pharma will issue 1 warrant at an exercise price of 100p.
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