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Currency in USD
Last close As at 26/05/2023
USD0.69
▲ −0.06 (−8.00%)
Market capitalisation
USD4m
Research: Healthcare
In a bid to strengthen its cash position, OpGen has announced a c $3.5m (gross) fund-raise through an equity issue, subject to shareholders’ approval and expected to close on or around 4 May 2023. As part of the offering, OpGen will issue 4.5m common shares (or pre-funded warrants) at $0.7785 per share (close to the last trading price of $0.7784/share) and a similar number of accompanying warrants. The warrants will be exercisable (if approved by shareholders) at a strike price of $0.7785 per share, with an expiry period of five years from the date of shareholders’ approval. Proceeds from the fund-raise are likely to support the ongoing commercialization of the Acuitas AMR Gene Panel and Unyvero suite of products, further development of the Ares database and services, working capital needs and repayment of the European Investment Bank (EIB) loan. Despite the challenging macroeconomic environment, the announced raise will, we estimate, increase the pro-forma gross cash position to $17.7m (at end FY22 plus the two fund-raises of $6.8m and $3.5m), extending the cash runway to Q323.
OpGen |
$3.5m fund-raise to extend runway |
Funding update |
Pharma and biotech |
3 May 2023 |
Share price performance
Business description
Analysts
OpGen is a research client of Edison Investment Research Limited |
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In a bid to strengthen its cash position, OpGen has announced a c $3.5m (gross) fund-raise through an equity issue, subject to shareholders’ approval and expected to close on or around 4 May 2023. As part of the offering, OpGen will issue 4.5m common shares (or pre-funded warrants) at $0.7785 per share (close to the last trading price of $0.7784/share) and a similar number of accompanying warrants. The warrants will be exercisable (if approved by shareholders) at a strike price of $0.7785 per share, with an expiry period of five years from the date of shareholders’ approval. Proceeds from the fund-raise are likely to support the ongoing commercialization of the Acuitas AMR Gene Panel and Unyvero suite of products, further development of the Ares database and services, working capital needs and repayment of the European Investment Bank (EIB) loan. Despite the challenging macroeconomic environment, the announced raise will, we estimate, increase the pro-forma gross cash position to $17.7m (at end FY22 plus the two fund-raises of $6.8m and $3.5m), extending the cash runway to Q323.
Year |
Revenue |
EBITDA* ($m) |
PBT* |
EPS* |
P/E |
Net debt/ (cash) ($m) |
12/21 |
4.3 |
(20.4) |
(35.7) |
(23.4) |
N/A |
(14.4) |
12/22 |
2.6 |
(20.6) |
(25.3) |
(10.4) |
N/A |
4.4 |
12/23e |
4.7 |
(17.7) |
(21.0) |
(3.8) |
N/A |
17.6 |
12/24e |
7.9 |
(15.3) |
(19.6) |
(3.6) |
N/A |
37.5 |
Note: *Figures are normalized, excluding amortization of acquired intangibles, exceptional items and share-based payments. EPS adjusted for the 1:20 share consolidation in January 2023.
As per the terms of the fund-raise, the company will obtain $3.5m in gross proceeds by issuing 4,495,825 common shares (or pre-funded warrants) at $0.7785 per share, along with an identical number of attached warrants. The warrants can be exercised at a strike price of $0.7785/share and within the expiry period of five years from the date of shareholders’ approval. Additionally, OpGen has revised the exercise price of previously issued warrants to $0.7785 per share (previously ranging from $2.65 to $7.54 per share), at the same exercise price as the latest warrants. We note that OpGen has a total 10.9m outstanding warrants as on date (including c 6.4m issued from February 2018 through January 2023), which, if fully exercised, could yield additional cash inflows up to $8.5m.
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. Importantly, the funds will also be used for the EIB loan repayment (the second tranche of €3m plus interest payments is due in June).
The recent cash raise should provide OpGen with additional headroom, extending the cash runway to Q323, based on our estimated operating cash burn of $4.5m per quarter. Incorporating the upcoming EIB loan repayment and working capital requirements, we anticipate the need to raise a further c $11.5m in H223 and another $45m over FY24–26, before reaching the scale to fund operations from internally generated cash flow in FY27.
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Research: Healthcare
Incannex has reported final results from its Phase I trial assessing the safety and pharmacokinetics (PK) of IHL-675A, a cannabidiol (CBD) and hydroxychloroquine (HCQ) fixed-dose combination drug, for the treatment of rheumatoid arthritis (RA). IHL-675A was generally well-tolerated and showed a comparable adverse event profile to reference drugs Epidiolex and Plaquenil. PK analyses revealed that CBD uptake was faster, and HCQ uptake was slower, for IHL-675A versus reference drugs. This could be advantageous for the combination drug, as CBD provides immediate relief for inflammation and pain in RA patients, and HCQ provides extended relief. In February 2023, Incannex initiated a blinded, placebo-controlled Phase II study for IHL-675A in RA. The company has also filed a pre- Investigational New Drug (IND) request with the FDA, intending to conduct parallel Phase II studies in the US. We view these results as encouraging for the clinical development of IHL-675A, provided data from Phase II studies continue to be supportive.
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