Shareholder Vote Looms as Alterity Raises A$40M to Advance Neurodegenerative Drug

Capital Raise Details and Investor Support

Alterity Therapeutics (ASX: ATH, NASDAQ: ATHE) announced a successful capital raising of A$40 million through a two-tranche placement aimed at accelerating the development of its lead drug candidate, ATH434. The placement attracted strong backing from both Australian and international institutional investors, underscoring confidence in the company’s neurodegenerative disease pipeline.

The first tranche, raising approximately A$12.8 million, will be issued under existing placement capacity and is expected to settle around mid-February 2025. The second tranche, targeting A$27.2 million, is conditional on shareholder approval at an Extraordinary General Meeting anticipated in late March 2025. Alongside the new shares, investors will receive attaching options exercisable at A$0.028, expiring in February 2027, subject to ASX quotation conditions.

Strategic Use of Proceeds to Advance ATH434

The funds raised will primarily support the continued clinical development of ATH434, particularly in Multiple System Atrophy (MSA), a rare and rapidly progressing neurodegenerative disorder. The company also plans to expand research efforts into Parkinson’s disease and other related indications, leveraging its drug discovery platform to develop novel compounds targeting underlying neurological pathologies.

CEO Dr. David Stamler highlighted the significance of recent Phase 2 clinical trial results, which demonstrated a 48% slowing of clinical progression in MSA patients at the 50 mg dose of ATH434, alongside a favourable safety profile and biomarker evidence of iron stabilization in affected brain regions. These promising outcomes have positioned Alterity to engage with the FDA to explore accelerated regulatory pathways.

Implications for Alterity’s Development Trajectory

This capital injection provides Alterity with a robust financial foundation to advance its clinical programs without immediate funding constraints, a critical factor for biotech companies navigating the costly and uncertain drug development landscape. The inclusion of related party commitments, including from CEO Dr. Stamler, signals strong insider confidence in ATH434’s potential.

However, the conditional nature of the second tranche and attaching options on shareholder approval introduces a near-term governance milestone that investors will watch closely. The company’s ability to maintain momentum in clinical development and regulatory engagement will be pivotal in sustaining investor enthusiasm beyond this funding round.

Broader Context in Neurodegenerative Disease Therapeutics

Alterity’s focus on MSA and Parkinsonian disorders addresses a significant unmet medical need, with limited effective treatments currently available. The positive Phase 2 data for ATH434, particularly its impact on clinical progression and biomarker stabilization, positions the company as a noteworthy player in the neurodegenerative therapeutics space. Continued progress could not only improve patient outcomes but also enhance shareholder value as the drug advances through regulatory milestones.