Alterity Therapeutics has secured an underwriting agreement that could provide at least $4.2 million in additional funding as the company prepares to begin its planned Phase 3 clinical trial of ATH434 in multiple system atrophy.
The Melbourne- and San Francisco-based biotechnology company said MST Financial Services would underwrite the exercise of up to 8.4 million unexercised ATHO listed options before they expire on Monday.
The options are exercisable at 50 cents each and, if fully underwritten, would raise about $4.2 million before costs. The arrangement covers any shortfall from existing optionholders who do not exercise their holdings before the expiry deadline.
There are 15.9 million ATHO options on issue, meaning Alterity could raise up to $7.96 million before costs if all options are exercised. The company expects to issue between 8.4 million and 15.9 million new ordinary shares, depending on existing optionholders' participation.
MST Financial Services has been appointed sole underwriter and will receive a fee equal to 7 per cent of gross proceeds from the options it underwrites. It has also entered sub-underwriting arrangements with sophisticated and professional investors, allowing it to allocate any shortfall shares among those investors.
Alterity said the funds would support continued late-stage development of ATH434, its lead candidate for multiple system atrophy, as well as general working capital.
Chief executive David Stamler said the underwriting would strengthen the company’s balance sheet as it worked towards a critical development milestone.
“This underwriting will provide additional funding as we work vigorously towards initiation of our planned Phase 3 pivotal trial in MSA,” Dr Stamler said. “It reflects continued confidence in ATH434 and helps strengthen our balance sheet as we work toward achieving this key milestone.”
Multiple system atrophy is a rare and rapidly progressive neurodegenerative disorder for which there are currently no disease-modifying treatments. Alterity says ATH434 has shown clinically meaningful efficacy in a randomised, double-blind, placebo-controlled Phase 2 study in people with the condition, alongside positive findings from an open-label Phase 2 study in participants with more advanced disease.
