Investors are selling off shares in precision oncology company Race Oncology Ltd (ASX: RAC) after a flurry of market sensitive announcements yesterday.
At the time of writing, shares in the RNA focused company are down around 12.47% at $3.30, as investors digest the updates announced after the bell on Tuesday.
What did Race Oncology announce?
The Company is intending to raise up to $29.7 million under the SPP. Eligible shareholders will have the opportunity to acquire fully paid ordinary shares in Race Oncology under the terms.
Shares will be issued at a price of $3 under the SPP. This is at a discount of 20.4% to Race Oncology’s last closing price.
Race Oncology has taken the liberty of providing three scenarios in which the funds will be raised and allocated.
In its best-case scenario, it hopes to raise the $29.7 million in order to finance various cancer and AML/MDS studies, whilst improving the formulation of its lead drug candidate called Zantrene.
Whereas in its base scenario, it hopes to raise $12 million and would narrow its study focus whilst refining the Zantrene formula.
Aside from this, Race Oncology also released the presentation from its AGM yesterday. In it, the company provided a strategic update to its “Three Pillar” strategy.
This involves extending Zantrene’s use to the “new area of cardio-protection, enhancing Zantrene’s utility for solid tumours through new formulations, and commencing a program to develop new RNA–targeting molecules”.
Speaking on the AGM, Race Oncology’s CEO and Managing Director Phil Lynch said:
2020-2021 has seen significant progress for Race. We have built a select and highly capable team, which has planned and completed important pre-clinical programs that positively capitalise on the FTO opportunity, most
recently reported for melanoma. We have also generated unexpectedly positive new preclinical data and insight indicating Zantrene provides cardio-protection, when used adjunctively with a traditional anthracycline chemotherapeutic. This is both a significant preclinical observation as well as a potentially large commercial opportunity for Race given there are few products that compete in this field.
The announcements follow an update out of Race’s corner on Monday. Investors bid up the Race Oncology share price following study readouts for Zantrene in a heart safety research program.
Race Oncology share price snapshot
Investors have responded poorly to the announcements today, driving the company’s share price down with force.
For instance, total trading volume today is over 445% of the 4-week average for Race Oncology shares at 1,148,215.
The Race Oncology share price is also down almost 6% in the past week of trading, however, has climbed over 89% this year to date.
As such it is well ahead of the benchmark S&P/ASX 200 index (ASX: XJO)’s gain of around 12% since January 1.