PYC Therapeutics has initiated a substantial capital raising effort, aiming to secure up to A$653 million to propel its four RNA therapeutic candidates through critical clinical milestones. The retail entitlement offer opens today, following a successful institutional placement.
- 3-for-5 pro-rata accelerated non-renounceable entitlement offer at $1.50 per share
- Total capital raise up to approximately A$653 million including a US specialist placement
- Funds to support registrational trials and first-in-human studies for four RNA drug candidates
- Offer underwritten up to A$200 million conditional on minimum $400 million raised in placement and institutional offer
- Cash runway extended through to 2030, enabling multiple near-term clinical data readouts
Capital Raising Overview
PYC Therapeutics Limited (ASX – PYC), a clinical-stage biotechnology company specialising in RNA therapies for genetic diseases, has launched a significant equity capital raising initiative. The company is offering a 3-for-5 pro-rata accelerated non-renounceable entitlement offer priced at $1.50 per new share, aiming to raise up to approximately A$525 million. This retail entitlement offer follows the completion of an institutional placement and entitlement offer that raised approximately A$537 million.
Alongside the entitlement offer, PYC has conducted a placement to US specialist life sciences investors, raising about A$128 million. Together, these efforts comprise a total capital raise of up to A$653 million, which is expected to provide PYC with a robust cash runway extending through to 2030.
Use of Proceeds and Pipeline Advancement
The funds raised will be directed towards advancing PYC’s four clinical-stage RNA therapeutic candidates targeting monogenic diseases with high unmet medical needs. These include –
- PYC-003 for Autosomal Dominant Polycystic Kidney Disease (ADPKD), progressing into registrational trials;
- PYC-002 for Phelan-McDermid Syndrome (PMS), moving into first-in-human trials to establish clinical proof of concept;
- VP-001 for Retinitis Pigmentosa type 11 (RP11), advancing into registrational trials following ongoing efficacy studies;
- PYC-001 for Autosomal Dominant Optic Atrophy (ADOA), progressing into registrational trials.
This capital injection is designed to support critical clinical milestones, including human efficacy data readouts anticipated over the next few years, positioning PYC to potentially bring transformative therapies to patients with limited or no treatment options.
Offer Structure and Underwriting
The entitlement offer is non-renounceable, meaning shareholders cannot trade or transfer their entitlements. Eligible retail shareholders in Australia and New Zealand can subscribe for three new shares for every five shares held as of the record date, with the option to apply for additional shares up to 100% of their entitlement through a top-up facility, subject to availability and scale-back at the company’s discretion.
PYC has secured an underwriting agreement with seven existing large shareholders to underwrite up to A$200 million of the entitlement offer, conditional on at least A$400 million being raised through the placement and institutional entitlement offer. This arrangement ensures a minimum total raise of A$600 million upon completion of the retail entitlement offer.
Market and Investor Implications
The offer price of $1.50 per share represents a 6.3% discount to the last traded price and a 3.7% discount to the theoretical ex-rights price, reflecting a strategic pricing to encourage participation. The capital raise is expected to strengthen PYC’s financial position significantly, enabling sustained investment in its pipeline and increasing its attractiveness to both existing and new investors, including specialist life sciences funds.
With a diversified portfolio of drug candidates addressing diseases with no current treatments, PYC is positioning itself at the forefront of RNA therapeutics innovation. The successful execution of this capital raising will be a critical enabler for the company’s transition towards commercialisation and potential partnerships or licensing opportunities.
Bottom Line?
As PYC Therapeutics embarks on this major capital raise, the market will keenly watch retail uptake and upcoming clinical milestones that could redefine treatment landscapes for genetic diseases.
Questions in the middle?
- Will retail shareholders fully subscribe to the entitlement offer, or will underwriting be required to meet targets?
- How will upcoming clinical trial data influence PYC’s valuation and investor sentiment?
- What are the potential regulatory hurdles for PYC’s RNA therapies in key markets like the US and Europe?