Major changes for Australian biopharmaceutical company Bionomics (ASX:BNO) with the retirement of its founding leader, a strategic review, and a major recapitalisation to raise almost $8 million.
Bionomics currently has several products in development including small molecule drug candidates for the treatment of chronic and neuropathic pain as part of an agreement with MSD.
Dr Deborah Rathjen has retired as the company's managing director but will remain its CEO until 31 January 2019.
The company also confirmed the resignation of chief financial officer Steven Lydeamore. Stephen Birrell has been appointed interim-CFO having previously served in the same role from 2005 to 2009. He rejoined Bionomics in 2013 as group financial controller.
Dr Errol De Souza, the company’s current non-executive chairman, has been appointed executive chairman.
According to Dr De Souza, “In FY18 Bionomics reduced costs by focusing efforts on our CNS portfolio and making the decision to divest our oncology assets, closing its US operations and reducing overall headcount.
"In order to preserve and enhance shareholder value, we are continuing to assess our strategic options for partnering and portfolio prioritisation and protection of our major assets whilst continuing to implement further cost-cutting measures to conserve cash. The change in leadership reflects the smaller organisation that Bionomics has become.”
Dr De Souza continued, “Deborah has been pivotal in building Bionomics from its inception as a genetics Company in 2000 to developing a strong therapeutics portfolio through both an acquisition and internal development strategy.
"She was instrumental in implementing our partnering strategy which has resulted in multiple collaborations over the years including our major ongoing collaboration with Merck & Co (known as MSD outside the United States and Canada). We thank Dr Rathjen for her significant contributions to Bionomics over a long period and look forward to working with her during this transition period.”
The company also announced the appointment of Greenhill & Co to conduct a "thorough review" of its strategic options.
“We were disappointed that the primary endpoint in the Phase 2 Post Traumatic Stress Disorder trial was not met. As we move forward, we will focus on the completion of the ongoing Phase 2 trial of BNC210 in hospitalised, elderly patients suffering from agitation," said Dr De Souza.
"We have stopped all other work on BNC210 until that time. We anticipate that the strategic review will be completed by the end of the first calendar quarter of 2019, following completion of the BNC210 trial and possible announcements related to advancement of the cognition program licensed to MSD.”
Bionomics confirmed a "recapitalisation" led by a major US-based biotechnology investor and its largest shareholder BVF Partners.
The recapitalisation, via a placement of 48,097,158 shares at $0.1637 per share to BVF and affiliated funds, raised $7,873,505.
The placement price represents a premium of 10 per cent to the volume-weighted average price of Bionomics shares in the past five day period.
“We are pleased to have the support of a world-class specialist investor in the capital raise," said Dr De Souza.
"This funding along with our ongoing cost cutting efforts are expected to provide Bionomics with the strategic flexibility to maximise shareholder returns from Bionomics’ existing partnership with Merck & Co. (known as MSD outside the United States and Canada) as well as from its remaining research and development assets.”
The placement will see BVF’s holding in Bionomics increase from approximately 10 per cent to almost 20 per cent of issued capital. BVF will also be invited to nominate a director to the Bionomics board.