RedHill Biopharma Ltd. (TASE: RDHL) has received offers to invest $4.5 million (NIS 17.5 million) from private investors, mostly current investors, in the company. RedHill will allot shares at NIS 4 per share, its current share price, to the investors as well as warrants at no cost, half an option per share. The warrants are exercisable within two years at NIS 4.60-6 per share, depending on the date exercised.
RedHill's share price fell 0.4%, following the announcement and it is traded at a market cap of NIS 217 million.
RedHill is leaning toward accepting the offer, and is opening the placement to additional investors for seven days at the same terms. The company hopes that it will be able to raise $7 million (NIS 27.3 million), amounting to 12% of its share capital. Taking the benefit into account, the placement is being made at a discount on the share price. The benefit is normal in public offerings and rights issues by life sciences companies, and could save the company the costs of an offering.
RedHill plans to begin advanced clinical trials for several products. Most of the trials will cost a few million dollars, but one will cost more than $10 million. If the trials are successful, RedHill may face marketing expenses, unless it establishes a partnership with a marketer. The company has $13 million in cash.
Published by Globes [online], Israel business news - www.globes-online.com - on November 19, 2012
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