CURRENT PRICE € 9.40 BUY
NETHERLANDS TARGET PRICE € 17.50 RATING UNCHANGED
Source: Thomson Reuters Datastream
News:
Today, Kiadis announced that it has raised € 18 million in a private placement.
2.25 million new shares were issued, representing 15% of the number of
outstanding shares prior to the transaction. The shares were placed at a
subscription price of € 8 per share, a 14% discount to the October 9th closing
price of € 9.4. The newly issued share will be traded as of 12 October. The
total number of outstanding shares now amounts to 17,287,397.
Additionally, Kiadis received € 2.3 million from the exercise of warrants placed
during the company’s last capital increase of € 5 million in June (exercise price
of € 7.7). With these to sources of new cash, Kiadis fulfils the condition of
raising an additional € 20 million set by Kreos Capital to receive the second
tranche of its debt financing of € 5 million. Kiadis had already received a first
tranche of € 10 million back in August of this year. The company has however
not yet disclosed whether it has already drawn the additional € 5 million. As a
reminder, Kiadis pays a 10% fixed annual interest on the € 15 million debt
financing from Kreos Capital.
Kiadis intends to use the newly acquired funds to support the further
development of lead product ATIR101 in its international phase III clinical trial.
The company also intends to prepare for a potential market launch of the
product in Europe, anticipated to take place in 2019. The company also
mentioned its intention to asses ATIR101 in combination with the Baltimore
protocol in an additional clinical study.
Our View/Conclusion:
After the limited cash increase of € 5 million in June, this placement represents
a somewhat more solid basis for further development of the company.
However, we believe a larger placement was anticipated by the market to
provide the company a longer runway. With an estimated cash position of € 15
million after the first tranche of debt financing, Kiadis current cash position is
estimated at € 35.3 million, not including Kreos Capital’s second tranche of
debt financing. Kiadis’ anticipated cash burn for 2017 stands at approximately
€ 17 million.
We currently estimate the costs for the ATIR101 phase III trial, the company’s
largest cost for the coming years, at € 24 million.