Why the Bionomics (ASX:BNO) share price is climbing today

The Bionomics Ltd (ASX: BNO) share price is climbing higher today on news it has received commitments for a capital raise.

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Giant magnet attracting banknotes to symbolise a capital raising

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The Bionomics Ltd (ASX: BNO) share price continues to climb today after the company announced it had received commitments for a placement.

At the time of writing, shares in the clinical-stage biopharmaceutical company are up 2.2% to 22.5 cents. Today’s movement follows major gains for the Bionomics share price recently, up 48% over the past week.

What’s moving the Bionomics share price?

Bionomics advised that it has entered agreements for a placement with several North American and European institutional and sophisticated investors to raise almost $16 million.

Under listing rule 7.1, the company will use its 15% placement capacity to issue 110,287,132 ordinary shares to eligible investors. Each share price will be offered at 14.5 cents, reflecting a 20% discount on the 30-day volume-weighted average recorded on 5 February. Notably, the new parcel of shares is trading at a 55% discount based on the current Bionomics share price.

The company expects the placement to be completed before 26 February.

Once the capital raise is wrapped up, Bionomics will launch an entitlement offer to its existing shareholders. The share purchase plan will offer the same price of 14.5 cents apiece. Bionomics will release further details to the ASX market in due course.

In addition, Apeiron Investment Group will help fund Bionomics’ BNC210 Phase 2b Clinical trials to treat post-traumatic stress disorder (PTSD). This was conducted with Apeiron underwriting a further raising of $15 million at a minimum price of 6 cents per share.

Management commentary

Bionomics executive chair Dr Errol De Souza welcomed the progress, saying:

We were pleased that a number of well-known specialist life sciences investment funds participated adding to a very strong shareholder base, which includes Apeiron Investments, Biotech Value Fund, Merck, Peter Thiel and Mike Novagratz.

We remain on track to the completion of our ongoing 7-day dosing pharmacokinetic study of our novel BNC210 tablet formulation in 1Q CY2021 and starting the Phase 2b PTSD trial in mid-2021.

Apeiron founder Christian Angermayer added:

We are pleased to support Bionomics both as an underwriter in this placement and as a long-term shareholder of the company. We look forward to participating in the entitlement offer alongside other investors.

PTSD and other mental health disorders are enormous burdens for those that live with them. Bionomics’ lead drug BNC210 has already received fast track designation from the FDA and I am confident of the strong potential of the upcoming Phase 2b PTSD trial to drive value for both patients and shareholders.

Foolish takeaway

The Bionomics share price has accelerated over the past 12 months, gaining more than 228%. The company’s shares hit a low of 3 cents in March, before moving on an upwards trajectory.

At the current share price, Bionomics commands a market capitalisation of $165 million.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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