Lepu Medical takes stake in Viralytics

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Viralytics (ASX:VLA), an innovator in the field of oncolytic immunotherapy, has raised $29,633,682 in a placement to Lepu Medical Group, a diversified life sciences company in China.

The investment is a private placement of 36,138,637 shares at a price of $0.82 each. The price represents a 27 per cent premium to the thirty-day volume weighted average price of Viralytics shares.

Following the placement, Lepu Medical will own about 13 per cent of Viralytics shares on issue.

“Lepu Medical is very pleased to make this investment in Viralytics as part of our strategic expansion into the field of cancer immunotherapy,” said Dr Zhongjie Pu, chairman of Lepu Medical.

“We have carefully reviewed the global oncolytic virus landscape and believe CAVATAK is the leading agent with demonstrated potential to enhance the activity of checkpoint inhibitors such as anti-PD-1(or PD-L1) across many important cancer types.

“We also look forward to exploring possible collaborative opportunities with Viralytics as part of our goal to develop a significant position in the Chinese oncology market,” added Dr Pu.

“We are excited by the opportunity presented by this support from Lepu, a well resourced and highly regarded company with substantial R&D and commercial capabilities,” said Malcolm McColl, Viralytics managing director.

“This financing will bring our cash balance to over $50 million, with a further $6.4 million anticipated from the R&D Tax Incentive for 2016/17, and enable us to accelerate our global clinical development program.”

Viralytics has previously announced plans to initiate a Phase 3 clinical trial of CAVATAK in melanoma patients in 2018 as well as to begin new clinical studies of CAVATAK across a range of indications and treatment settings, including colorectal cancer, head and neck cancer and ocular melanoma.