Actinogen Medical — A$11.1m capital raise completed

Actinogen Medical (ASX: ACW)

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Research: Healthcare

Actinogen Medical — A$11.1m capital raise completed

Actinogen Medical announced the successful completion of its A$3.0m share purchase plan (SPP), which closed 1.3x oversubscribed. With its previously disclosed A$8.1m share placement, total funds from the combined capital raising reached the targeted A$11.1m in gross proceeds. The company expects that the total proceeds will enable its operating runway to reach the release of top-line results for its XanaMIA Phase IIb/III trial in patients with mild-to-moderate Alzheimer’s disease (AD), expected in mid-CY26. The next major catalyst for Actinogen is the interim results on the first c 100 patients of this study, expected in mid-CY25, which could lead to licensing and/or value realisation opportunities. Our risk-adjusted net present value is A$619.8m (vs A$616.8m previously).

Written by

Pooya Hemami

Analyst - Healthcare

Healthcare

Actinogen Medical

A$11.1m capital raise completed

Financing completion

Pharma and biotech

15 October 2024

Price

A$0.028

Market cap

A$65m

A$0.68/US$

Net cash (A$m) at 30 June 2024

9.5

Shares in issue (excluding the expected issuances of 100m shares for the SPP and c 37.7m shares to Actinogen’s CEO and other directors following 4 November shareholder meeting)

2,945m

Free float

90%

Code

ACW

Primary exchange

ASX

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(25.7)

(63.4)

31.8

Rel (local)

(27.5)

(64.8)

11.9

52-week high/low

A$0.09

A$0.02

Business description

Actinogen Medical is an ASX-listed Australian biotech developing its lead asset Xanamem, a specific and selective 11β-HSD1 inhibitor designed to treat cognitive impairment (CI) that occurs in chronic neurodegenerative and neuropsychiatric diseases. Currently, Actinogen is targeting CI in two indications: the early stages of Alzheimer’s disease and major depressive disorder.

Next events

Interim results for Phase IIb XanaMIA study in CI associated with AD

Mid-CY25

Potential start of Phase IIb study in major depressive disorder

H2 CY25

Analyst

Pooya Hemami OD MBA CFA

+44 (0)20 3077 5700

Actinogen Medical is a research client of Edison Investment Research Limited

Actinogen Medical announced the successful completion of its A$3.0m share purchase plan (SPP), which closed 1.3x oversubscribed. With its previously disclosed A$8.1m share placement, total funds from the combined capital raising reached the targeted A$11.1m in gross proceeds. The company expects that the total proceeds will enable its operating runway to reach the release of top-line results for its XanaMIA Phase IIb/III trial in patients with mild-to-moderate Alzheimer’s disease (AD), expected in mid-CY26. The next major catalyst for Actinogen is the interim results on the first c 100 patients of this study, expected in mid-CY25, which could lead to licensing and/or value realisation opportunities. Our risk-adjusted net present value is A$619.8m (vs A$616.8m previously).

Year
end

Revenue
(A$m)

PBT*
(A$m)

EPS*
(A$)

DPS
(A$)

P/E
(x)

Yield
(%)

06/23

4.9

(8.9)

(0.005)

0.0

N/A

N/A

06/24

9.9

(11.4)

(0.005)

0.0

N/A

N/A

06/25e

7.3

(11.4)

(0.004)

0.0

N/A

N/A

06/26e

14.1

(19.3)

(0.006)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. EPS are fully diluted.

Proceeds to support XanaMIA Phase IIb/III study

Proceeds from Actinogen’s capital increase of A$11.1m are primarily being directed towards the ongoing 36-week XanaMIA Phase IIb/III study assessing Xanamem in patients with biomarker-positive AD (as determined through elevated levels of the p-Tau 181 biomarker at baseline). For both the A$8.1m share placement (270m shares) and the A$3.0m SPP (100m shares), new shares are being issued at A$0.03, and subscribers would also receive three new 36-month share purchase options for every four new shares issued, at an exercise price of A$0.05 per share.

Shareholder meeting on 4 November to ratify SPP

An extraordinary general meeting is behind held on 4 November to authorise the issuance of 100m shares under the SPP and the subscription, as part of the share placement, of A$1m in shares by Actinogen’s CEO, Dr Steven Gourlay, as well as A$0.13m from other directors of the company. The remaining c 232.5m shares (c 86%) of the share placement have already been listed on the Australian Securities Exchange. We expect the required approvals to be met at the meeting.

Valuation: Mild revision to reflect SPP

In our prior note, we had adjusted our forecasts to reflect the A$8.1m placement but not the SPP. After now including the A$3.0m SPP, we obtain a total equity valuation of A$619.8m (vs A$616.8m previously), or A$0.20 per share (vs A$0.21 previously). The per-share valuation has decreased as we have adjusted the share count in our valuation to reflect the effects of the SPP. According to our model, Actinogen’s funds on hand (A$20.0m pro forma as at 30 June 2024 including the A$11.1m financing and A$0.6m in offer costs), along with anticipated R&D tax credit proceeds (c A$9m proceeds expected in or around November CY24), should be sufficient for Actinogen to fund its operations into the anticipated top-line data readout for the XanaMIA Phase IIb/III study (guided for mid-CY26).

Exhibit 1: Financial summary

A$(000)

2020

2021

2022

2023

2024

2025e

2026e

Year end 30 June

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

3,516

1,984

3,640

4,888

9,932

7,318

14,118

Cost of Sales

0

0

0

0

0

0

0

Gross Profit

3,516

1,984

3,640

4,888

9,932

7,318

14,118

Sales, General & Administrative

(2,962)

(3,111)

(4,558)

(6,568)

(7,235)

(6,046)

(6,348)

Net Research & Development

(5,537)

(2,406)

(8,215)

(8,900)

(15,535)

(13,235)

(27,206)

EBITDA

 

 

(4,983)

(3,533)

(9,133)

(10,580)

(12,839)

(11,964)

(19,436)

Amortisation of intangible assets

(314)

(313)

(313)

(313)

(314)

(314)

(314)

Depreciation & other

(99)

(74)

(88)

(93)

(103)

(169)

(186)

Normalised Operating Profit (ex. amort, SBC, except.)

(4,888)

(3,318)

(7,933)

(9,156)

(11,635)

(12,133)

(19,622)

Operating profit before exceptionals

(5,201)

(3,631)

(8,245)

(9,469)

(11,948)

(12,447)

(19,935)

Exceptionals including asset impairment

0

0

0

0

0

0

0

Stock-based compensation & other

(194)

(289)

(1,288)

(1,517)

(1,307)

0

0

Reported Operating Profit

(5,396)

(3,920)

(9,533)

(10,985)

(13,256)

(12,447)

(19,935)

Net Finance income (costs)

65

5

36

233

212

709

358

Profit Before Tax (norm)

 

 

(4,822)

(3,313)

(7,897)

(8,923)

(11,423)

(11,424)

(19,264)

Profit Before Tax (FRS 3)

 

 

(5,331)

(3,915)

(9,497)

(10,752)

(13,044)

(11,738)

(19,578)

Tax

0

0

0

0

0

0

0

Profit After Tax and minority interests (norm)

(4,822)

(3,313)

(7,897)

(8,923)

(11,423)

(11,424)

(19,264)

Profit After Tax and minority interests (FRS 3)

(5,331)

(3,915)

(9,497)

(10,752)

(13,044)

(11,738)

(19,578)

Average Basic Number of Shares Outstanding (m)

1,118.0

1,405.2

1,717.1

1,801.5

2,174.3

2,897.1

3,082.6

EPS - normalised (A$)

 

 

(0.004)

(0.002)

(0.005)

(0.005)

(0.005)

(0.004)

(0.006)

EPS - normalised and fully diluted (A$)

 

(0.004)

(0.002)

(0.005)

(0.005)

(0.005)

(0.004)

(0.006)

EPS - (IFRS) (A$)

 

 

(0.005)

(0.003)

(0.006)

(0.006)

(0.006)

(0.004)

(0.006)

Dividend per share (A$)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

BALANCE SHEET

Fixed Assets

 

 

3,772

3,287

2,889

2,520

2,436

2,640

2,993

Intangible Assets

3,346

3,033

2,720

2,408

2,094

2,281

2,467

Tangible Assets

19

17

13

113

341

359

527

Investments in long-term financial assets

408

237

156

0

0

0

0

Current Assets

 

 

8,164

15,091

20,417

12,688

18,876

18,076

3,757

Short-term investments

0

0

0

0

0

0

0

Cash

5,040

13,457

16,370

8,460

9,451

11,265

3,531

Other

3,123

1,634

4,047

4,228

9,426

6,812

226

Current Liabilities

 

 

(744)

(755)

(1,480)

(1,802)

(1,357)

(1,357)

(1,357)

Creditors

(744)

(755)

(1,480)

(1,802)

(1,357)

(1,357)

(1,357)

Short term borrowings

0

0

0

0

0

0

0

Long Term Liabilities

 

 

(304)

(165)

(87)

0

(258)

(258)

(5,258)

Long term borrowings

0

0

0

0

0

0

(5,000)

Other long term liabilities

(304)

(165)

(87)

0

(258)

(258)

(258)

Net Assets

 

 

10,889

17,458

21,740

13,407

19,696

19,101

135

CASH FLOW STATEMENT

 

 

 

 

 

 

 

 

 

Operating Income

(5,396)

(3,920)

(9,533)

(10,985)

(13,256)

(12,447)

(19,935)

Movements in working capital

(3,591)

(1,513)

(3,143)

132

(5,577)

2,614

6,586

Net interest and financing income (expense)

65

5

36

233

212

709

358

Depreciation & other

99

74

88

93

103

169

186

Taxes and other adjustments

5,966

3,630

3,035

1,829

1,567

314

314

Net Cash Flows from Operations

 

 

(2,856)

(1,724)

(9,517)

(8,698)

(16,951)

(8,641)

(12,492)

Capex

(23)

(6)

(3)

(37)

(8)

(687)

(853)

Acquisitions/disposals

0

0

0

0

0

0

0

Interest received & other investing activities

0

0

0

(0)

0

0

0

Net Cash flows from Investing activities

 

(23)

(6)

(3)

(37)

(8)

(687)

(853)

Net proceeds from share issuances

0

10,195

12,491

903

18,041

11,142

612

Net movements in long-term debt

0

0

0

0

0

0

5,000

Dividends

0

0

0

0

0

0

0

Other financing activities

282

(84)

(71)

(78)

(92)

0

0

Net Cash flows from financing activities

 

282

10,111

12,420

825

17,950

11,142

5,612

Effects of FX on Cash & equivalents

0

0

49

0

0

0

0

Net Increase (Decrease) in Cash & equivalents

(2,596)

8,381

2,949

(7,910)

991

1,814

(7,733)

Cash & equivalents at beginning of period

7,637

5,040

13,422

16,370

8,460

9,451

11,264

Cash & equivalents at end of period

5,040

13,422

16,370

8,460

9,451

11,264

3,531

Closing net debt/(cash)

 

 

(5,448)

(13,694)

(16,527)

(8,460)

(9,451)

(11,265)

1,469

Lease debt

390

236

165

87

319

319

319

Closing net debt/(cash) inclusive of IFRS 16 lease debt

(5,058)

(13,458)

(16,361)

(8,373)

(9,132)

(10,945)

1,788

Free cash flow

(2,878)

(1,730)

(9,520)

(8,735)

(16,959)

(9,328)

(13,345)

Source: Company accounts, Edison Investment Research

General disclaimer and copyright

This report has been commissioned by Actinogen Medical and prepared and issued by Edison, in consideration of a fee payable by Actinogen Medical. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by Actinogen Medical and prepared and issued by Edison, in consideration of a fee payable by Actinogen Medical. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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