Synairgen PLC (LON:SYNG) (AIM:SNG, OTC:SYGGF), the respiratory-focused biopharmaceutical company, has announced plans to raise up to £19 million to fund the development of SNG001, its investigational inhaled interferon beta treatment.
The funding includes a subscription and a £6 million placing and open offer.
TFG Asset Management is backing the larger tranche. It will acquire shares at 2p each, a 47% discount to Thursday's close.
For the non-underwritten fundraising to proceed, the company must secure a minimum of £2.9 million.
The funds will enable Synairgen to advance a phase II trial of SNG001 in mechanically ventilated patients with respiratory viral infections.
These patients face mortality rates of 25% to 45%, and the company aims to demonstrate the treatment’s potential to significantly reduce these rates.
Potential partnerships
In addition to supporting trial costs, the investment will cover drug manufacturing and stability testing, positioning SNG001 as a valuable candidate for future partnerships with pharmaceutical companies.
CEO Richard Marsden said: “SNG001 is a broad-spectrum antiviral offering potential against common cold, flu, and coronaviruses, which can lead to critical illness.
"By delivering SNG001 directly into the lungs as an aerosol, we aim to boost and restore the lungs' antiviral responses to improve patient outcomes.
"If we can demonstrate a significant reduction in mortality, it will make SNG001 a valuable asset that is attractive to pharma company partners.”
Rule 9 waiver
Should the fundraising proceed, TFG's shareholding would exceed 30%, triggering Rule 9 of the Takeover Code, which mandates a takeover offer. However, the Takeover Panel has agreed to waive this requirement.
If Synairgen’s non-underwritten fundraising fails to raise the minimum £2.9 million, the company will not proceed with the placing, open offer, or director subscriptions. In such a scenario, Synairgen plans to cancel its shares from trading on AIM.
TFG Asset Management UK, which is expected to hold an 86.9% stake, has indicated its willingness to support the delisting by leveraging its majority holding to pass the necessary resolution.
Looking ahead
The phase II trial for SNG001 is expected to commence in early 2025. If successful, the trial could pave the way for commercialisation and partnerships, offering hope for critically ill patients while unlocking significant value for Synairgen.