{"id":3529,"date":"2023-12-20T05:16:44","date_gmt":"2023-12-20T05:16:44","guid":{"rendered":"https:\/\/economicherald.net\/?p=3529"},"modified":"2023-12-20T05:16:44","modified_gmt":"2023-12-20T05:16:44","slug":"santa-and-ato-delivers-pharmaust-550k-cash-boost-for-christmas","status":"publish","type":"post","link":"https:\/\/economicherald.net\/?p=3529","title":{"rendered":"Santa (and ATO) delivers PharmAust $550k cash boost for Christmas"},"content":{"rendered":"<p>Special Report:\u00a0Santa has come early for PharmAust with the Australian Tax Office (ATO) granting a refund of more than $550k after approval of its application for a Research and Development Tax Incentive (RDTI), topping off a strong year for the clinical-stage biotech. <\/p>\n<p>The ATO has approved <a href=\"https:\/\/stockhead.com.au\/health\/pharmaust-completes-phase-1-motor-neurone-disease-trial-applies-for-orphan-drug-designation\/\"><strong>PharmAust\u2019s (PAA)<\/strong><\/a> RDTI application with $553,435.28 deemed refundable on its FY23 tax return \u2013 with the funds having hit the company\u2019s bank account today.<\/p>\n<p>The RDTI scheme is jointly administered by the ATO and AusIndustry, under which companies can receive up to a 43.5% refundable tax offset of eligible expenses on R&amp;D activities.<\/p>\n<p>\u201cWe appreciate the continued support and acknowledgement by the Australian Government for the critical work undertaken in our R&amp;D programs,\u201d PAA finance director Sam Wright says.<\/p>\n<p>2023 has been a strong year for PAA after hitting several clinical milestones.\u00a0 In a tough year for the ASX healthcare sector, the company has stood out as a strong performer, with its share price doubling since January.<\/p>\n<p>\u201cIt\u2019s been a great year and fantastic result for shareholders with the share price doubling from around 6 cents at the start of 2023 to 12 cents now,\u201d Wright says.<\/p>\n<p>\u00a0<\/p>\n<h2><strong>Funds add to ~$3.5m cap raise<\/strong><\/h2>\n<p>Wright says receipt of the R&amp;D refund further strengthens PAA\u2019s financial position to execute on its upcoming clinical trials following a strongly supported capital raise.<\/p>\n<p>PAA last week announced prominent Perth-based fundie Merchant Funds Management will become a strategic investor and it had received\u00a0binding commitments to raise ~$3.46 million through an oversubscribed placement.<\/p>\n<p>The company says the raise was priced at a 4.8% premium to the 15-day VWAP and a 10.8% premium to the 30-day VWAP, reflecting new institutional shareholders\u2019 growing confidence in its achievements over recent quarters, as well as a positive outlook.<\/p>\n<p>The strategic placement was granted primarily to Merchant Funds Management, within its Merchant Biotech Fund, who approached PAA to become an investor.<\/p>\n<p>Merchant Biotech Fund and associated parties subscribed for $2.1 million of the offer.<\/p>\n<p>The remaining $1.4 million of the placement went to sophisticated Australian, Hong Kong, and Singaporean investors, including existing eligible shareholders, along with Wright.<\/p>\n<p>The placement will see PAA issue ~34.6 million new shares at an issue price of 10 cents\/share, each with a 2:3 free attaching option exercisable at 15 cents with an expiry of December 31, 2025.<\/p>\n<p>\u201cWe\u2019ve certainly had strong and growing support from existing retail shareholders but also institutional shareholders on the back of results and upcoming catalysts,\u201d Wright says.<\/p>\n<p>PAA will now leap into 2024\u00a0with around $6 million cash in the bank.<\/p>\n<p>\u00a0<\/p>\n<h2><strong>Funding for upcoming clinical trials in year of catalysts<\/strong><\/h2>\n<p>PAA is now well funded for 2024, in what is set to be another big year for the company which <a href=\"https:\/\/stockhead.com.au\/health\/pharmaust-completes-phase-1-motor-neurone-disease-trial-applies-for-orphan-drug-designation\/\">recently completed Phase 1 MEND study<\/a> of the drug monepantel (MPL) in patients with motor neurone disease (MND\/ALS).<\/p>\n<p>PAA is due to release top line results from the study in Q1 2024. All patients from the Phase\u00a01 trial have also been invited to move to a 12-month open-label trial.<\/p>\n<p>The company will also use data from the Phase 1 study to open an investigational new drug (IND) application, with the FDA to start a Phase 2 study in H1 CY24.<\/p>\n<p>PAA has applied for an\u00a0orphan drug designation (ODD) with the US FDA for MPL to treat MND\/ALS.<\/p>\n<p><a href=\"https:\/\/www.fda.gov\/patients\/rare-diseases-fda#:~:text=The%20Orphan%20Drug%20Act%20defines,people%20in%20the%20United%20States.&amp;text=Back%20to%20top-,What%20is%20the%20Orphan%20Drug%20Act%3F,drugs%20to%20treat%20rare%20diseases.\">The FDA\u2019s ODD program<\/a> aims to incentivise development of drugs for rare diseases, defined as affecting less than 200,000 people in the US.<\/p>\n<p>An ODD offers various incentives including tax credits and market exclusivity for several years.<\/p>\n<p>On the upside for shareholders, research shows an ODD can also lead to a surge in share price.<\/p>\n<p>Research by Blue Ocean Equities <a href=\"https:\/\/www.linkedin.com\/pulse\/odds-ripple-effect-asx-biotech-prices-fda-incentives-big-baker-1cn0c%3FtrackingId=bHLva0aVzRhoJYih2Rd1lw%253D%253D\/?trackingId=bHLva0aVzRhoJYih2Rd1lw%3D%3D\">corporate advisor Matthew Baker<\/a> has found that an ODD announcement led to an 11-fold average increase in intraday volumes (with a median of 6.7 fold increase), often coinciding with price spikes.<\/p>\n<p>\u201cRemarkably, 70% of investors saw an average of 29% improvement in their holdings in the week following the announcement (median 9%),\u201d Baker says in his research article.<\/p>\n<p>PAA is also looking to advance its study of MPL treatment for canine B-Cell lymphoma into a field study in the US early next year in about 60 dogs, lasting for about 12 months.<\/p>\n<p>\u201cWe\u2019ve certainly got lots happening in 2024 and some key catalysts, building upon what has been a strong year for PharmAust,\u201d Wright says.<\/p>\n<p>\u00a0<\/p>\n\n<p><span class=\"mce_SELRES_start\">\ufeff<\/span>\u00a0<\/p>\n<p><em>This article was developed in collaboration with PharmAust, a Stockhead advertiser at the time of publishing. <\/em><\/p>\n<p><em>\u00a0<\/em><\/p>\n<p><em>This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.<\/em><\/p>\n<p><em>\u00a0<\/em><\/p>\n<p><em>Blue Ocean acts as corporate advisor to PharmAust and has equity in the company. <\/em><\/p>\n<p><span class=\"et_bloom_bottom_trigger\"><\/span><\/p>\n<p>The post <a href=\"https:\/\/stockhead.com.au\/health\/santa-and-ato-delivers-pharmaust-550k-cash-boost-for-christmas\/\">Santa (and ATO) delivers PharmAust $550k cash boost for Christmas<\/a> appeared first on <a href=\"https:\/\/stockhead.com.au\/\">Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"<p>Special Report:\u00a0Santa has come early for PharmAust with the Australian Tax Office (ATO) granting a refund of more than $550k after approval of its application <a href=\"https:\/\/economicherald.net\/?p=3529\" class=\"read-more-link\">[more&#8230;]<\/a><\/p>\n","protected":false},"author":0,"featured_media":3530,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-3529","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - 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