Biotech minnow Antisoma taps market for £15.2m

Antisoma, the biotech minnow that has in effect become a research arm of the Swiss drugs giant Roche, sprang a surprise fund raising yesterday, tapping the market for £15.2m.

Glyn Edwards, the chief executive, said the extra cash would be ploughed immediately into new cancer drug work and he would also step up the search for new product acquisitions.

Although Antisoma will run out of cash in two years, the City had expected Mr Edwards to wait until at least next spring to raise new funds, by which time the company would know the results of trials of its lead drug, a treatment for ovarian cancer.

But he said he had learnt from his experience two years ago when the company was forced into an emergency rights issue at a wide discount to the prevailing share price.

"Investors criticised us very heavily last time for leaving it until we had little cash in the bank. People saw that we needed to raise cash, they knew it would have to be at a discount and so we got into a sort of death spiral of the share price going down."

The new placing and open offer has been priced at 40p a share, a 10 per cent discount to Monday's closing share price, and is fully underwritten by Nomura. The proceeds will be used to fund wider trials of a drug that looks like it can kill cells in the middle of a tumour, and to push two more products towards human trials.

Antisoma has taken a different tack to other cash-strapped biotech companies. It tied up an innovative deal with Roche last year that gives the pharmaceutical giant the right to sell all the company's cancer drugs, in return for help paying for human trials. And Mr Edwards has spurned merger activity with rivals, which has been seen as the quickest way to get bigger in a sector that is often below the radar of institutional investors.

Of his plans for the extra cash, Mr Edwards said yesterday: "This is a way of building a better balanced, stronger company without looking round for an acquisition, which may or may not happen and might come with additional baggage."