Botanix Pharmaceuticals Ltd (ASX: BOT) shares are ending the week on a positive note.
In morning trade, the clinical dermatology company's shares are up 9% to a 52-week high of 36.5 cents.
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Why are Botanix Pharmaceuticals shares rising?
Investors have been buying the company's shares today in response to an announcement relating to its Sofdra product.
Yesterday, Botanix revealed that the US Food and Drug Administration (FDA) has approved Sofdra as a prescription medicine used to treat primary axillary hyperhidrosis (excessive underarm sweating) in adults and children 9 years and older.
This makes it the first and only new chemical entity approved by the FDA to treat primary axillary hyperhidrosis and presents a novel safe and effective solution for patients who have lacked treatment options for this socially challenging medical condition.
Botanix notes that there are approximately 10 million people in the United States with primary axillary hyperhidrosis, with few effective treatments available for patients. This gives it a large market opportunity to grow into.
Speaking of which, the company plans to launch its patient experience program in the third quarter of 2024. After which, it is anticipating its first revenue from Sofdra early in the fourth quarter of the year.
Botanix CEO, Dr Howie McKibbon, commented:
We are pleased to share this accomplishment with our dedicated Botanix team and dermatologist partners, patients who participated in the clinical studies and our shareholders who made this approval possible. This is a transformative event for Botanix as we transition from a development stage to a revenue generating dermatology company.
Capital raising
Following the FDA approval, Botanix decided to immediately launch a capital raising, which is now complete.
Management revealed that it has received firm commitments from a significant number of new leading Australian and international institutional investors at a 10.4% discount of $0.30 per new Botanix share. This has raised $70 million in gross proceeds.
The proceeds from the placement will be applied towards funding the launch of Sofdra in the United States. This includes funding its sales force and marketing infrastructure, as well as digital marketing costs and the telemedicine platform, manufacturing costs, as well as new quality assurance, pharmacovigilance and support services.
Botanix's executive chairman, Vince Ippolito, commented:
We are extremely pleased to announce this significant Placement, following on from the successful approval of Sofdra by the FDA yesterday. We are grateful to our loyal base of shareholders for supporting us through the approval of Sofdra and we welcome our new institutional investors, as we enter this exciting commercial phase.
Botanix shares are up over 200% since this time last year.
