Argent BioPharma’s Facility Closures and LSE Delisting Signal Strategic Shift Amid Cash Burn

Operational Restructuring and Cost Optimisation

Argent BioPharma Ltd (ASX: RGT) has taken decisive steps to streamline its operations in the December 2024 quarter, announcing the closure of two manufacturing facilities. This strategic move is part of a broader optimisation plan aimed at reducing operational demands by outsourcing certain manufacturing activities. The company expects these changes to lower its overall cost base and improve its cash burn rate, a critical consideration for clinical-stage biopharmaceutical firms navigating the capital-intensive drug development landscape.

Corporate and administration expenses for the quarter totalled A$615,000, including legal fees and maintenance of GMP-certified facilities, alongside A$200,000 spent on marketing and advertising. Operating cash outflows reached A$1.208 million, with staff costs related to R&D accounting for A$461,000.

Delisting from London Stock Exchange

In a notable corporate governance update, Argent BioPharma formally delisted from the London Stock Exchange on 31 December 2024. The company cited a thorough review of listing requirements and associated costs as the rationale behind this decision, opting to maintain its listings on the Australian Securities Exchange and the OTCQB market. This move is expected to reduce administrative overheads and allow management to focus resources more efficiently on core business activities.

Capital Raising and Convertible Notes Restructuring

To bolster its financial position, Argent completed a private placement raising A$200,000 during the quarter, issuing shares at A$0.30 each to address funding shortfalls related to its drug development pipeline. Post-quarter, the company secured a substantial US$4.5 million placement at approximately A$0.64 per share, accompanied by free attaching warrants exercisable at US$0.55, subject to shareholder approval for the second tranche.

Additionally, Argent restructured its 2020 Convertible Notes facility with Mercer Street Capital Partners LLC, refinancing 300,000 notes and adjusting the minimum conversion price to A$0.30. These notes were subsequently converted into ordinary shares, reflecting a strategic effort to manage debt and equity balance.

Regulatory Milestone: German Market Entry

Argent BioPharma achieved a significant regulatory milestone by securing approval from Germany's Federal Institute for Drugs and Medical Devices (BfArM) for the import and distribution of CogniCann, an oromucosal spray targeting specific health conditions. This approval enables prescription by clinicians and general practitioners, marking an important step in the company’s European market penetration strategy. The approval process for CannEpil, another lead product, is underway, signaling continued progress in expanding the company’s commercial footprint.

Financial Position and Outlook

At quarter-end, Argent reported cash on hand of A$718,000, supported by unused financing facilities totaling A$7.65 million, primarily from its convertible note facility. The company estimates it has approximately 6.9 quarters of funding available based on current operating cash flows, providing a reasonable runway to advance its clinical programs and operational restructuring.

Payments to related parties, including executive and non-executive directors, amounted to A$52,000 during the quarter, reflecting standard governance disclosures.

Overall, Argent BioPharma’s December quarter update underscores a company in transition, balancing cost discipline with strategic capital raises and regulatory progress. The focus remains firmly on advancing its neuroimmunology-focused pharmaceutical candidates, leveraging innovative nano-medicine technologies to address unmet medical needs.