e-therapeutics plc plans to de-list from the London Stock Exchange’s junior AIM market after slamming the risk appetite of UK investors.
The MedTech intends to raise £28.9 million by way of a share subscription led by funds managed by existing investors M&G Investment Management and Richard Griffiths. It is also proposing the cancellation of its shares on the AIM.
The subscription price of 15 pence represents a premium of approximately 30% to the closing mid-market price of 11.55p on 8th April.
Both moves are conditional upon shareholder approval which will be sought at a general meeting to be held on 29th April 2024.
e-therapeutics’ share price initially dropped from its starting position of 10.50p on Wednesday but climbed to 12.50p by the close.
The company’s CEO Ali Mortazavi said it had been contemplating delisting from the AIM market “for over a year”.
“Given the dramatic rise in the US BioTech indices in Q3 2023 which has seen record amounts of capital being raised, we decided to remain on the AIM market and embarked on a capital raise roadshow in February-March 2024,” he continued.
“Despite the firm commitments given by our two largest shareholders, the board was extremely disappointed by the lack of institutional UK interest in our innovative, technology-driven value propositions. Importantly, ETX struggled to get sufficient engagement from the vast majority of the institutions who were approached, reflecting the risk appetite of the UK markets.
“This trend has been a consistent theme over the last four years and the company has primarily raised funds through the current two key shareholders, who continue to support the company irrespective of its listing status. As such, we believe that there is a limited available audience on the AIM market for companies such as ETX.”
e-therapeutics integrates computational power and biological data to discover life-transforming RNAi medicines.
“The board believes that the current valuation of ETX in no way reflects the company’s position as a leading TechBio company, with powerful enabling technologies both on our computational and genetic medicines platforms, and a maturing pipeline of differentiated RNAi assets,” added Mortazavi.
“ETX is active and has specialist expertise in the most disruptive and attractive areas in BioTech. However, it is the board’s view that there could be a far larger pool of capital available as an unlisted company as opposed to an AIM listed one and that this situation is very unlikely to change in the near future.
“We understand that there will be a short-term reduction in liquidity as a result of this decision but we are of the firm belief that it is in the best interest of all shareholders to delist from the AIM market, with a strong cash position of approximately £47 million following this fundraise.
“We have also stated our willingness to explore relisting the Company in the future on the US NASDAQ exchange where the large gap in the valuation of ETX compared to its US peers can hopefully be narrowed. I would also like to take this opportunity to thank both Richard Griffiths and M&G for their continued support and we look forward to regularly updating shareholders on our progress.”
The company has a current cash position of approximately £18m and says the gross proceeds from the proposed fundraise of £28.9m will considerably strengthen its balance sheet.
‘It’s been brutal running THG these past 2 years’ – Moulding