AdAlta’s Deep Discount Rights Issue Signals Urgency to Advance CAR-T Strategy
AdAlta Limited has announced a renounceable rights issue to raise up to $1.3 million, aiming to accelerate its ‘East to West’ cellular immunotherapy strategy and explore new strategic options.
- 2-for-3 renounceable rights issue priced at 0.3 cents per share
- Free attaching options exercisable at 1 cent with three-year term
- Partially underwritten to $0.3 million by Mahe Capital
- Funds to advance CAR-T in-licensing and evaluate strategic assets
- Rights trading begins 7 May 2025, closing 23 May 2025
Capital Raise Details
AdAlta Limited (ASX:1AD), a clinical-stage biotechnology company focused on cellular immunotherapies for solid cancers, has announced a renounceable rights issue to raise up to $1.3 million before costs. The offer allows eligible shareholders to subscribe for two new shares for every three shares held at a discounted price of 0.3 cents per share, representing a roughly 51% discount to the 15-day volume weighted average price (VWAP).
In addition to the new shares, shareholders will receive one free attaching option for every two new shares subscribed. These options carry an exercise price of 1 cent and a three-year term, with the company intending to seek ASX quotation for these options subject to regulatory approval.
Strategic Use of Funds
The capital raised will primarily support AdAlta’s ongoing business development efforts, particularly advancing its “East to West” cellular immunotherapy strategy. This includes finalizing the company’s first CAR-T in-licensing agreement, a critical step toward expanding its pipeline of innovative T cell therapies targeting solid tumors, a segment that remains underserved despite accounting for 90% of cancers.
Additionally, the funds will enable AdAlta to evaluate other strategic options for its existing assets, potentially unlocking further value for shareholders. CEO Tim Oldham emphasized the importance of this fundraising in realizing the company’s growth opportunities and advancing its clinical and commercial ambitions.
Underwriting and Shareholder Participation
The rights issue is partially underwritten to $0.3 million by Mahe Capital Pty Ltd, the lead manager and underwriter. Notably, CEO Tim Oldham plans to participate personally and sub-underwrite a portion of the shortfall to the tune of $35,000, signaling management’s confidence in the company’s prospects.
Eligible shareholders in Australia and New Zealand will be able to trade their rights starting 7 May 2025, with the offer expected to close on 23 May 2025. Shareholders can also apply for additional shares beyond their entitlement, providing an opportunity to increase their stake.
Market Context and Outlook
AdAlta’s approach integrates Asian innovation in T cell therapies with Australia’s clinical and manufacturing capabilities, positioning the company to bridge Eastern development with Western regulatory markets. This strategy aims to capitalize on the rapidly growing cellular immunotherapy market, projected to reach over US$20 billion by 2028.
The company’s lead asset, AD-214, targets fibrotic diseases and has demonstrated promising results in preclinical and Phase I studies, further diversifying its portfolio beyond oncology. The rights issue proceeds will help maintain momentum across these fronts.
Bottom Line?
AdAlta’s capital raise sets the stage for pivotal licensing deals and strategic moves that could reshape its growth trajectory.
Questions in the middle?
- Will AdAlta successfully finalize the CAR-T in-licensing agreement and on what timeline?
- How will the market respond to the significant discount and dilution from the rights issue?
- What strategic options might the company pursue for its historical assets beyond the current pipeline?
