Health Check: Clarity shares surge after ‘fast and sizeable’ $203m raise

Shares in nuclear medicine play Clarity Pharmaceuticals have surged up to 12% after the company’s swift $203 million raising.

Clarity's rhino sized raising also put together at a rocket pace - and in total secrecy. Pic via Getty.

• Clarity Pharmaceuticals rocket up to 12% after its blitzkrieg placement
• Artrya, Botanix and Imricor are among today’s quarterly updates
• Lumos outlines US market potential

Radiopharmaceutical group Clarity Pharmaceuticals (ASX:CU6) has surprised investors with a monstrous $203 million institutional placement, struck at a 15% premium to the company’s 15-day average price.

None will be more surprised than the short sellers, who account for close to 10% of the company’s register.

Executive chairman Dr Alan Taylor says the “fast, well executed and sizeable” placement was to a small group of local instos “close to the company”.

Unusually, no-one blabbed and the shares did not enter trading halt.

“I have never done a deal that fast,” Taylor told Stockhead.

“A week ago, I would have said we were not doing a capital raising, but there was a lot of interest from a very concentrated group .

"The raising was struck at $4.20 a share, a 2.2% premium to Friday’s close and a hefty 18% more than the 15-day weighted average price.

The raising comes amid what Taylor dubs “an incredibly tumultuous” period driven by US politics, as well as some “unfortunate news” from local biotechs (read: Opthea's (ASX:OPT) phase III trial failure).

In December Clarity shares were promoted to the ASX200, which was good for enhancing Clarity’s profile.

But it also contributed to shorting activity. Given the share gains, these investors are likely to be buying up stock to cover their positions.

Well funded for trials

Clarity emerges from the raising with $288 million of cash, which will fund the company’s packed slate of trials.

These include two phase III prostate cancer imaging trial aimed at US Food & Drug Administration registration, dubbed Amplify and Clarify.

Amplify is for patients with biochemical recurrence post treatment; Clarify is for those intended to undertake prostate removal.

Both are open label and single-arm (with no placebo and comparison cohort).

Another trial on the sidelines, Co-PSMA compares Clarity’s tool with the standard-of-care diagnosis methods.

The company expects an initial data readout on this one before the end of the year, with Amplify and Clarify readouts next year.

Clarity listed in August 2021, raising a record $92 million at $1.40 apiece.

The company then went one better in April last year, raising $121 million in a right issue and placement (at $2.55 a share).

The raising is one of the biggest in biotech history and the chunkiest since Mesoblast gathered $260 million in a placement in January.

Imricor confident of US approval

Imricor Medical Systems (ASX:IMR) is confident of US approval of its world-first ablation catheter this year.

We say ‘world’s first’ because the device is the only one capable of being guided by magnetic resonance imaging (MRI), as opposed to x-ray fluoroscopy.

Imricor’s submission is by way of a staggered, modular process.

The company reports the second module is under review and the company expects to submit the third module in the December quarter.

“We expect a steady string of 510(k) product submissions and approvals , which in turn helps accelerate the commercial launch across the US," the company says.

In the March quarter European regulators approved Vision-MR, the company’s updated catheter for type 1 atrial flutter, under the Continent's bolstered Medical Devices Regulation.

In the June quarter they also gave the nod to Advantage-MR, which enables a physician to use a recording system and cardiac stimulator while ablating.

The European gatekeepers also approved Northstar, “the world’s only MRI-native 3D mapping and guidance system.”

With June quarter receipts of US$85,000, Imricor is yet to start European sales in earnest.

The company posted June quarter outflows of US$4.43 million, taking cash on hand to a handy US$50.3 million.

Sales will flow this quarter, says plaque-buster Artrya

Still on matters of the heart, Artrya (ASX:AYA) expects first US subscription revenue from its AI-enabled Salix coronary plaque detection platform in the current quarter.

An algorithm-based artificial intelligence tool, Salix detects the plaque deposits on x-ray coronary computed tomography angiograph (CCTA) images.

Despite vulnerable plaque being the cause of most heart attacks, plaque currently is not routinely reported in cardiac imaging and diagnostics.

It’s difficult to detect with the naked eye in traditional images.

In March the FDA approved Salix Coronary Anatomy (SCA) and Artrya is now seeking the agency’s consent for Salix Coronary Plaque (SCP).

SCP expands applicability to detecting and quantifying coronary arterial plaque for those patients who have undergone a coronary CT angiogram.

The SCP module will integrate automatically with SCA.

SCA already is being trialled and in clinical use, by Artrya's customers and partners, generating a symbolic $8000 in receipts of the quarter.

Earlier this month Artrya inked its first commercial deal, a five-year minimum $600,000 contract with Tanner Health.

Artrya expended $5.44 million for the quarter, taking cash to $11.3 million. The company expects a $4.5-5 million R&D tax refund by the end of the year.

Botanix reports 600% revenue uptick

Botanix Pharmaceuticals (ASX:BOT) reports net revenue of $4.3 million from US sales of Sofdra, compared with $700,000 in the March quarter.

The company launched the drug – which treat an excessive sweating condition – in the US in March quarter.

The ‘net’ descriptor is relevant, because some folks were taken aback after the company’s July 8 update which showed the extent to which other parties clipped the revenue ticket,

Doctors wrote 7053 prescriptions during the quarter, 324% higher than 2975 in the March stanza.

The number of prescribers rose 11%, to 2316 from 1075 previously.

Launching a drug is not cheap and the company burnt $28.4 million, leaving cash of $64.9 million.

Let’s be CLIA, it’s a big market says Lumos

Lumos Diagnostics (ASX:LDX) expects its Febridx virus-versus-bacterial diagnostic tool to capture eight million US patients within three years, via its company making distribution deal with Phase Scientific.

Announcing the tie up on July 16, Lumos said the deal would deliver US$2 million immediately – cash the company has, indeed, banked – and a total of US$317 million ($487 million) over six years.

Detailing the arrangement on Friday, CEO Doug Ward said the company expected a total addressable market of 80 million, assuming the FDA grants a so-called CLIA waiver.
The number consists of patients present with acute respiratory infections.

“Our thinking is that in years two to three we will be 2% or 3% of that,” Ward said. “In year six, that ramps up to 10%.”

As in Clinical Laboratories Improvement Act, CLIA requires hospitals and labs to operate under government accreditation

Exemption from CLIA enables parties such as GPs and medical assistants to carry out the low-complexity lateral-flow assays.

In financial terms, the market increases tenfold, to US$1 billion a year.

Lumos is carrying out a trial to support its FDA application and has recruited close to 120 of the bacterial-positive patients required.

Coming back to the finances, Phase pays Lumos another US$1.5 million on its CLIA application, expected next month.

On FDA approval, Phase pays another US$5 million.

That leaves US$308 million over years three to six, which Ward says is based on minimum order volumes.

Lumos shares rocketed 133% on the back of the Phase announcement and have held their gains.

Originally published as Health Check: Clarity shares surge after ‘fast and sizeable’ $203m raise