Rhythm Biosciences Unveils $3.75M Placement with 52.5M Options, Awaiting Shareholder Nod

Capital Raise and Options Offer

Rhythm Biosciences Limited (ASX – RHY) has announced a significant capital raising initiative through a placement of up to 41.65 million new shares priced at 9 cents each, aiming to raise approximately $3.75 million before costs. Alongside this, the company is offering up to 52.45 million new options to select investors, directors, and its lead manager, subject to shareholder approval at a meeting expected in November 2025.

The new options carry an exercise price of 20 cents and expire on 30 November 2027. Placement investors and directors will receive one option for every new share issued at no additional cost, while the lead manager, CPS Capital Group Pty Ltd, is offered 10.8 million options at a nominal price as partial remuneration for capital raising and advisory services.

Strategic Use of Funds

Proceeds from the placement will provide Rhythm Biosciences with additional working capital to support the ongoing development and commercialization of its cancer diagnostic platforms, notably ColoSTAT®, a blood test for colorectal cancer detection, and Genetype, a cancer risk assessment platform already commercialized in Australia and the USA.

The company anticipates that if all options are exercised, it could raise an additional $10.5 million, although there is no certainty that this will occur. The capital injection is intended to underpin regulatory compliance efforts, marketing, and strategic partnerships essential for product rollout in key markets.

Governance and Shareholder Considerations

The offer is not open to the general public but restricted to invited professional and sophisticated investors, directors, and the lead manager. Shareholder approval is a critical condition for the issuance of both the new shares and options, ensuring existing shareholders have a say in the potential dilution of their holdings.

Importantly, the company states that the placement and options issuance are not expected to materially affect control, with no single investor projected to hold more than 20% voting power post-issuance. The new options will be quoted on the ASX under the code RHYOA, providing liquidity and tradability for option holders.

Risks and Forward Outlook

Rhythm Biosciences underscores the speculative nature of the investment, highlighting risks related to regulatory approvals, commercialization success, intellectual property protection, and market acceptance. The company’s products are at various stages of clinical validation and regulatory pathways, with ColoSTAT® targeting approvals in Australia, the UK, EU, and the USA.

Investors are cautioned that the exercise of options depends on future share price performance and that the company’s ability to raise further capital on favorable terms is uncertain. The company’s ongoing success hinges on navigating complex regulatory environments and securing strategic partnerships to commercialize its diagnostic technologies effectively.