Rhythm Biosciences Raises $3.75M to Launch ColoSTAT® and Expand geneType™
Rhythm Biosciences has announced a $3.75 million placement to accelerate the commercial launch of its ColoSTAT® cancer detection test and expand its geneType™ product suite into key markets. The capital raise includes director participation and attaching options, pending shareholder approval.
- Placement to raise up to $3.75 million via ~41.6 million new shares at $0.09 each
- New shares represent a 14.7% dilution of existing capital
- Funds earmarked for ColoSTAT® commercial launch and geneType™ market expansion
- Directors to participate subject to 2025 AGM approval
- Attaching options exercisable at $0.20 offered, pending shareholder approval
Capital Raise Details
Rhythm Biosciences Limited (ASX, RHY) has announced a placement to sophisticated and institutional investors to raise approximately $3.75 million through the issue of around 41.6 million new shares priced at $0.09 each. This price represents a 14.3% discount to the last closing price and a deeper discount relative to recent volume-weighted average prices, reflecting a strategic move to secure capital ahead of key commercial milestones.
The placement shares will dilute existing shareholders by roughly 14.7%, with directors planning to participate to the tune of $0.3 million, subject to shareholder approval at the upcoming 2025 Annual General Meeting. Alongside the placement, the company proposes to issue attaching options exercisable at $0.20 with a term extending to November 2027, also pending shareholder consent.
Strategic Use of Funds
The capital raised will primarily support the commercialisation of Rhythm’s ColoSTAT® test, a proteomic-based cancer detection assay targeting bowel cancer, scheduled for launch in the fourth quarter of 2025. The funds will also accelerate the expansion of the geneType™ genomic product suite into North American and Australian markets, aiming to boost awareness, adoption, and integration into mainstream healthcare systems through strategic partnerships.
General working capital needs and capital raising costs will also be covered, ensuring the company maintains operational flexibility as it prepares for rapid global commercial growth. Rhythm’s portfolio addresses a significant total addressable market exceeding USD 50 billion, focusing on early cancer detection and risk assessment, a critical area given the increasing global cancer burden.
Market Position and Outlook
Rhythm Biosciences is positioning itself as a key player in the early cancer detection space with a diversified product pipeline that includes both proteomic and genomic platforms. The upcoming launch of ColoSTAT® and ongoing development of geneType™ products are expected to drive revenue growth and market penetration. The company’s leadership team, with extensive experience in biotech and diagnostics, underscores its commitment to advancing impactful cancer risk assessment technologies.
While the placement discount and dilution may raise some concerns among investors, the targeted use of proceeds towards commercialisation and strategic partnerships could unlock significant value if product launches meet expectations. The attaching options offer an additional incentive for investors, potentially aligning interests over the medium term.
Bottom Line?
Rhythm’s capital raise sets the stage for critical product launches and market expansion, but execution risks remain ahead.
Questions in the middle?
- Will ColoSTAT® achieve regulatory and market acceptance as planned in Q4 2025?
- How will the market respond to the placement discount and shareholder dilution?
- What strategic partners will Rhythm secure to accelerate geneType™ adoption?
