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Currency in USD
Last close As at 25/03/2023
USD0.17
▲ 0.04 (30.77%)
Market capitalisation
USD7m
Research: Healthcare
OpGen has announced a $3.38m (gross) fund-raising through a private placement to an existing healthcare-focused institutional investor. This is in exchange for a combined 9.66m of common stock and pre-funded warrants at $0.35/unit plus an additional 33.8k shares of series C preferred stock. The investor was also issued warrants to purchase up to an aggregate of 9.66m in common stock, at an exercise price of $0.377/share. The offer is expected to close on 3 October 2022 and is subject to shareholders’ approval. Proceeds from the fund-raising are expected to be utilized in accelerating development of the company’s pipeline, capex and working capital needs and repayment of the EIB loan. Our overall valuation goes up to $84.6m due to additional cash available although per share valuation goes down to $1.46/share due to a higher share count (previously $1.70/share).
OpGen |
$3.38m raised through private placement |
Fund-raising update |
Pharma and biotech |
3 October 2022 |
Share price performance
Business description
Analysts
OpGen is a research client of Edison Investment Research Limited |
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OpGen has announced a $3.38m (gross) fund-raising through a private placement to an existing healthcare-focused institutional investor. This is in exchange for a combined 9.66m of common stock and pre-funded warrants at $0.35/unit plus an additional 33.8k shares of series C preferred stock. The investor was also issued warrants to purchase up to an aggregate of 9.66m in common stock, at an exercise price of $0.377/share. The offer is expected to close on 3 October 2022 and is subject to shareholders’ approval. Proceeds from the fund-raising are expected to be utilized in accelerating development of the company’s pipeline, capex and working capital needs and repayment of the EIB loan. Our overall valuation goes up to $84.6m due to additional cash available although per share valuation goes down to $1.46/share due to a higher share count (previously $1.70/share).
Year end |
Revenue |
PBT* ($m) |
EPS* |
DPS |
P/E |
Yield |
12/20 |
4.2 |
(24.7) |
(1.57) |
0.0 |
N/A |
N/A |
12/21 |
4.3 |
(35.7) |
(1.17) |
0.0 |
N/A |
N/A |
12/22e |
4.6 |
(24.0) |
(0.50) |
0.0 |
N/A |
N/A |
12/23e |
7.7 |
(21.4) |
(0.44) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Management has disclosed that the funds have been raised against the issue of 5.3m in common shares and 4.3m pre-funded warrants (each pre-funded warrant is exercisable for one share of common stock at $0.35/unit) along with 33.81k shares in series C preferred stock. The stock was issued at a c 7% discount to the last closing price of $0.377. The agreement also comes with 100% warrant coverage, to purchase up to 9.66m of common stock at an exercise price of $0.377/share with a six-month vesting period and expiry in March 2028. In addition, the company communicated its plans to effect a reverse stock split/stock consolidation of the common stock (subject to shareholder approval), successful conclusion of which would result in a termination of the series C preferred stock.
We understand that the healthcare-focused investor has previously supported OpGen’s capital requirements, investing c $50m in the company in 2021. The investor holds 14.8m warrants in OpGen (of a total 16.2m outstanding as of 31 December 2021), the terms of which will be amended following the closure of the registered offering, with the exercise price reduced to $0.377/share (previously $2.05–65/share) with a vesting period of six months and a 5.5-year term.
The funds will be used for commercialization efforts for OpGen’s Unyvero platform and Acuitas AMR Gene Panel, to further develop and commercialize Ares Genetics, to support sales and marketing activities and capex and working capital needs. Notably, the funds would also be used for the EIB loan repayment (€16.4m total borrowings plus deferred interest at end-Q222; €0.7m to be repaid per month).
The private placement (gross proceeds) constitutes 18.6% of the current market capitalisation of OpGen and should provide additional headroom for OpGen to execute its commercialization and portfolio development. We forecast a total capital requirement of $50m through 2025.
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Research: Investment Companies
Riverstone Credit Opportunities Income (RCOI) is a closed-end fund that invests in mid-market energy company credit mostly via direct loans. This is a niche sector of low loan to value (LTV), delayed draw loans of relatively short duration, often employed as bridge loans by the borrowers. RCOI can invest broadly across the sector but has been repositioning towards entities building infrastructure and providing infrastructure services as well as those focused on the energy transition to zero carbon. Asset quality has been holding up well and the last three loan realisations had gross IRRs of 14–21%, while management sees a good pipeline. We note the fully funded 8.5% dividend yield and the 16% NAV discount. RCOI started a share buyback programme in July, because the board believes the shares do not reflect the portfolio value and high-performing strategy.
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