AdAlta Launches $1.29M Rights Offer to Accelerate CAR-T Licensing Push

Capital Raise to Fuel Strategic Shift

AdAlta Limited (ASX:1AD), a clinical-stage biotechnology company, has launched a renounceable pro rata rights offer to raise approximately $1.29 million before costs. The offer invites eligible shareholders to subscribe for two new shares for every three shares held at a discounted price of 0.3 cents per share, accompanied by one new option for every two new shares subscribed. This capital raise is a critical step in funding AdAlta’s transition towards its 'East to West' cellular immunotherapy strategy, primarily executed through its subsidiary AdCella.

Backing from Insiders and Underwriters

The rights offer is underwritten up to $300,000 by Mahe Capital Pty Ltd, which also acts as corporate adviser and will receive options and fees as part of the arrangement. Additionally, Dr Timothy Oldham, CEO and Managing Director, has committed to underwriting a portion of the offer amounting to $35,000, including taking up his full entitlement. Notably, the board and CEO have suspended their fees and salaries to conserve cash, reflecting a commitment to prudent capital management during this pivotal phase.

Strategic Focus on CAR-T Licensing and Asset Development

AdAlta’s capital deployment plan prioritizes advancing a first CAR-T product in-licensing transaction for AdCella, with $0.5 million earmarked for this purpose. The company is in exclusive negotiations for three differentiated CAR-T cell therapy assets targeting solid tumors, a market segment with significant unmet need and growth potential. The licensing strategy involves 'Westernising' Asian innovations by conducting US FDA-compliant clinical trials in Australia, thereby creating value for both AdAlta and its partners.

Beyond CAR-T, the company intends to allocate $0.25 million towards advancing business development for its proprietary assets AD-214, a next-generation protein therapeutic for fibrotic diseases, and WD-34, an anti-malarial i-body candidate. The remaining funds will support evaluation of other strategic options and general working capital needs.

Financial Position and Dilution Considerations

If fully subscribed, the offer will increase AdAlta’s share capital by approximately 66.7%, issuing up to 428.8 million new shares and 214.4 million new options. The new shares will rank equally with existing shares, while the options carry an exercise price of $0.01 and expire in June 2028. Shareholders who do not participate risk dilution of their holdings. The company’s pro forma balance sheet post-offer shows an improved cash position to support near-term milestones.

Risks and Market Context

AdAlta’s prospectus outlines significant risks typical of early-stage biotech companies, including clinical development uncertainties, regulatory hurdles, financing challenges, and competitive pressures. The company’s success hinges on securing definitive licensing agreements, completing clinical trials, and raising further capital as needed. Market volatility and global financial conditions add layers of complexity to the capital raising environment.

Nevertheless, AdAlta’s 'East to West' strategy leverages Asia’s innovation in cellular therapies and Australia’s clinical and manufacturing expertise, positioning the company as a potential force multiplier in the CAR-T space. The company aims to finalize at least one licensing transaction in the June 2025 quarter, subject to financing, with ambitions to secure additional assets by year-end.