BioWorld International Correspondent
LONDON - Stem Cells Sciences plc added a listing on the Australian Stock Exchange (ASX) to its listing in London, raising AS$12 million (US$9.9 million).
The Edinburgh, Scotland-based company closed the offer ahead of plans following strong demand, and it was heavily oversubscribed.
Peter Mountford, CEO, told BioWorld International he was delighted with the reception. "It's been a pleasant change from our usual efforts at fund-raising," he said, noting there is a mini-boom on the Australian market at present.
The company decided to list on the ASX to take advantage of strong ties to the country (Mountford himself is Australian) and because of the need to use any opportunity to raise money.
Also, Mountford has been disappointed with the company's performance on the Alternative Investment Market (AIM) in London, since it listed there in July 2005, coming away with £6 million (then US$10.5 million), rather than the hoped for £$10-15 million.
"We've had a disappointing run in respect to how the [AIM] market saw us, and the liquidity in the market," said Mountford, adding, "There are too many small cap companies on AIM, dividing attention."
Before the ASX listing, Stem Cell Sciences' investors were split 50:50 between the UK and Australia; now the majority are Australian.
Despite the reservations, the company intends to maintain its listing in London. "We are a UK-headquartered company, largely based on intellectual property from the UK," Mountford said.
The listing on ASX consists of 11.2 million shares in the form of CHESS Depository Interests (CDIs) at AS$1.07 each. These are the equivalent of U.S. ADRs in that the holders have beneficial ownership of the shares, rather than the legal title. The owners of CDIs can move them between AIM and ASX. Stem Cell Sciences will have an ASX market capitalization of AS$49.6 million, based on the April 2 closing price in the UK.
Mountford said the new money will be spent in accordance with the business plan. "There are lots of opportunities in the pipe we want to pursue, with the Cambridge [UK] manufacturing facility instituted last year, and U.S. operations kicking off this year."
The company has ambitions to develop stem cell-based therapeutics, but has taken a conservative approach to building value, developing business lines selling animal-free media and cell lines for use in drug discovery, to drive revenues.
"We were not previously pushing to the clinic, but we are now coming forward a little faster on the back of animal work done by academic collaborators," Mountford said.
"We have some exciting early stage results, and are cautiously advancing more money into clinical development," he added.
The U.S. presence will be spearheaded by David Dodd who was recently appointed as nonexecutive chairman. Before joining Stem Cell Sciences, he was CEO of Serologicals Corp., of Atlanta, for six years, taking that life sciences company from a valuation of $85 million to $1.4 billion, when it was acquired by Millipore Corp., in July 2006. "He's one of the hottest properties at the moment in the U.S.," said Mountford.