BARD1 (ASX:BD1) share price falls 6% on placement update

The medical diagnostics company has secured the first part of its equity raise…

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The BARD1 Life Sciences Ltd (ASX: BD1) share price is deep in negative territory late this afternoon. This comes after the medical diagnostics company provided investors with an update on its capital raising efforts.

At the time of writing, BARD1 shares are down 6.39% to $1.685.

What’s happening to the BARD1 share price?

BARD1 shares are falling despite a successful capital raise to accelerate the development and commercialisation of its cancer diagnostics pipeline.

According to its release, the company has raised $15 million (before costs) through a placement. The offer saw sophisticated, institutional and professional investors apply for the shares. The company said this shows strong support for the programs, which are focused on the early detection of cancer to improve patient outcomes.

Around 9.67 million new ordinary shares will be added to its registry at a price of $1.55 cents a pop. This represents a discount of 13.9% to the last closing price of $1.80 per share on 20 July 2021.

In addition, BARD1 noted that for every 2 shares issued under the placement, each investor will be entitled to one free quoted option. This will be exercisable at a price of $2.32 until the expiry date of 24 August 2023.

The shares will be ranked equally and BARD1 will use its existing placement capacity to create the new shares. Under listing rule 7.1 and 7.1A, this allows the allotted shares to be issued without shareholder approval.

The proceeds of the placement will primarily be used to advance SubB2M programs for breast and ovarian cancers. These programs have so far shown high accuracy in proof-of-concept studies. BARD1 is aiming to have a laboratory partner in the United States in 2023.

Settlement of the new shares is expected to occur on 23 August 2021.

Furthermore, the company is seeking to raise another $2 million through a Share Purchase Plan (SPP). The SPP will offer the same terms as the placement.

Post completion of both capital raising components, BARD1 forecasts a proforma net cash balance of around $20.6 million.

Management commentary

BARD1 CEO Dr Leearne Hinch touched on the company’s plans, saying:

BARD1 is developing a pipeline of cancer diagnostics for the early detection of breast, ovarian, prostate and pancreatic cancers. We are advancing our cancer diagnostics pipeline towards commercialisation, with a focus on our lead SubB2M programs for breast and ovarian cancers that have shown high accuracy in proof-of-concept studies. The funds raised will accelerate development, validation and planned commercial launch of these products as laboratory developed tests in the US with a laboratory partner in 2023.

The BARD1 share price has gained 80% in the last 12 months, and is up more than 140% in 2021.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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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