The Australian share market may be pushing higher again on Friday, but the same cannot be said for one ASX All Ords stock.
In morning trade, EBR Systems Inc (ASX: EBR) shares are down 14% to 83.5 cents.
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Why is this ASX All Ords stock sinking today?
The catalyst for today's weakness has been the successful completion of an institutional placement and accelerated institutional entitlement offer from the medical device company.
According to the release, the ASX All Ords stock has raised a total of approximately $45.8 million from institutional investors. This comprises $37.4 million from the institutional placement and $8.5million from the institutional entitlement offer.
These funds were raised at an issue price of 82 cents per new share, which represents a 15.9% discount to its last close price.
Management revealed that the institutional offer was well supported by existing shareholders. It also attracted new domestic and international institutional shareholders to the register.
Why is it raising funds?
The ASX All Ords stock launched the capital raising to support the commercialisation and manufacturing scale up of its novel WiSE CRT system in anticipation of U.S. FDA approval in the first quarter of 2025.
The WiSE CRT system was developed to eliminate the need for cardiac pacing leads. It is historically the major source of complications, effectiveness, and reliability issues in cardiac rhythm disease management.
The initial product is designed to eliminate the need for coronary sinus leads to stimulate the left ventricle in heart failure patients requiring Cardiac Resynchronisation Therapy (CRT). Future products will potentially address wireless endocardial stimulation for bradycardia and other non-cardiac indications.
Subject to FDA approval, EBR is preparing for a 2025 launch targeting an initial US market opportunity of US$3.6 billion.
Management commentary
The ASX All Ords stock's CEO, John McCutcheon, was pleased with the capital raising. He commented:
We are pleased to have closed the A$45.8m institutional component of the capital raise, which was fully subscribed for by a range of new and existing investors. The Company can now receive a further A$4.2m from the fully underwritten retail component Entitlement Offer.
This strengthens the Company's cash position and allows the Company to focus on executing its commercialisation strategy and subject to FDA approval, driving initial adoption in high-volume US sites participating in the pivotal SOLVE-CRT clinical trial, leading to initial revenue in CY2025. We would like to thank our current securityholders for their continued support, and we are pleased to welcome the new securityholders to the register.
A retail entitlement offer aiming to raise $4.2 million will open next week on 24 September.
