The Mesoblast Limited (ASX: MSB) share price is sliding after resuming trade from a company-requested trading halt today.
Earlier this week we noted that Mesoblast shares were on ice as the company prepared to raise additional equity capital.
Today the company said it has completed the financing round via a private placement.
The Mesoblast share price is currently down 8.06% to 86 cents.
Image source: Getty Images
What did Mesoblast announce?
The company advised it has completed a $65 million equity raise today.
It did so through the issue of 86.7 million new ordinary shares via a global private placement. The placement was led by its largest shareholder, M&G Investments in the United Kingdom.
Mesoblast says the private placement was made at 75 cents per share, representing a 5% discount to the 30 trading-day volume weighted average price (VWAP). There were no associated warrants or options issued.
As a result of the capital injection, Mesoblast now has US$105 million in cash on hand. The company will use the funds partly for the launch of its lead drug candidate, remestemcel-L.
Mesoblast will also allocate money towards starting the phase 3 trial of its rexlemestrocel-L label.
The trial is investigating the drug's efficacy in treating "chronic low back pain associated with degenerative disc disease".
What did management say?
Speaking on the results, Mesoblast CEO, Dr Silviu Itescu said the company was "very appreciative of the ongoing strong support" from its major stakeholders.
"Our most advanced product, remestemcel-L, aims to save the lives of patients afflicted with SR-aGVHD, a condition with high mortality and in particular, an unmet need in children," he added.
The company says it also has patent protection on its portfolio until 2041, at least, in all major markets.
The Mesoblast share price has fallen more than 55% in the past 12 months.
