Shares in Island Pharmaceuticals Ltd (ASX: ILA) are trading higher despite the company raising money at a discount, as its US plans begin to take shape.
The company said on Wednesday morning that it had raised $9 million through the issue of new shares at 35 cents apiece, with the placement cornerstoned by a US family office, "with additional commitments from a select group of local and international investors''.
While discounted capital raisings generally result in share price weakness, Island shares were trading 15.4% higher at 45 cents on Wednesday morning.
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Pathway to approval laid out
This was likely due to the company providing further detail on the regulatory pathway for its key antiviral compound, Galidesivir, in a separate announcement to the ASX.
The company said in a statement it "advises it has received highly constructive and strategically important guidance from the US Food & Drug Administration (FDA), confirming the validity of Island's proposed animal model and outlining final steps required to progress Galidesivir toward approval under the Animal Rule''.
The company went on to say:
The FDA's correspondence, received 30 January 2026 provides clear regulatory alignment on the use of the Angola strain of Marburg, the cynomolgus macaque model and the viral challenge dose – the core elements that underpin Animal Rule development. This confirmation represents a major de-risking milestone for the program. The FDA has now defined a two-stage clinical development pathway for Galidesivir, enabling Island to move rapidly into targeted dose-optimisation and pharmacokinetic (PK) studies, followed by a pivotal confirmatory study required for approval.
The company said it would conduct two trials in "a limited number of non-human primates'' with that data to be submitted to the FDA to support further clinical trials.
Island said that approval under the animal rule "represents a transformational opportunity, providing a defined regulatory pathway for medical countermeasures targeting high consequence viral threats''.
The company added:
Animal Rule approval may unlock US Government procurement, including potential inclusion in the Strategic National Stockpile (SNS) – a pathway associated with significant, long-term, non-dilutive revenue.
Island Managing Director Dr David Foster said the new funding came at a pivotal time for the company.
Following the FDA's confirmation of Galidesivir's Animal Rule development pathway, we now have a clearly defined, executable route to approval, and this funding ensures we are fully resourced to move forward without delay." "The placement provides the financial strength to complete our two-stage Animal Rule program, progress toward a New Drug Application, and manufacture additional Galidesivir supply to meet clinical development and potential commercial readiness objectives. Importantly, it removes funding risk at a time when regulatory uncertainty has been materially reduced.
The good news follows Island announcing last month that it had won patent protection for Galidesivir.
