Island lifts 50pc on $3.5m capital raise and Phase 2a/b dengue trial progress

Island Pharmaceuticals is up over 50% after announcing a $3.5M capital raise and the dosing of all subjects in its ISLA-101 Phase 2a trial for dengue fever.

Island Pharmaceuticals lifts on $3.5m cap raise and dengue trial update. Pic: Getty Images.

• Island Pharmaceuticals undertakes a $3.5m capital raise strongly supported by cornerstone investors

• All subjects dosed in the Phase 2a component of Island’s Phase 2a/b PROTECT clinical trial for dengue fever

• The study capitalises on years of research by the US Army to develop an attenuated strain of the dengue virus

Island Pharmaceuticals (ASX:ILA) has announced firm commitments for a two-tranche placement to existing and new investors to raise ~$3.5m at 7c per share.

ILA said it will issue 50m new fully paid ordinary shares at the offer price, representing an 11.39% discount to the volume-weighted average price (VWAP) over the 15 days up to and including September 30, 2024, and a 12.5% discount to the closing price on September 30, 2024.

Additionally, 50m new options at 7c per option will be issued, subject to shareholder approval at the ILA AGM.

The first tranche of the placement, managed directly by Island without external broking fees, comprises more than 27m shares (~$1.905m) and will be issued using the company's placement capacity under ASX listing rules.

The second tranche, comprising 23m shares (~$1,594m) and 50m options, is subject to shareholder approval, which is expected to be obtained at the company’s AGM.

Cornerstone investors back placement

The placement is supported by cornerstone investors including biotech investor Dr Daniel Tillett, a well-known name in the industry currently leading Race Oncology as its CEO, prominent Hong Kong-based fund manager Angus Walker, and ILA co-founder and major investor Dr Bill Garner.

Substantial shareholder Jason Carroll, and recently appointed non-executive director Chris Ntoumenopolous (subject to shareholder approval) are also taking part in the placement.

Strong position to complete Phase 2a/b study

CEO and managing director Dr David Foster said the fundraising was an outstanding outcome for ILA and puts the company in a strong position to complete the current Phase 2a/b study for ISLA-101.

“It also supports due diligence for the Galidesivir antiviral program and provides the necessary acquisition funding should we proceed with the potential acquisition,” he said.

"We are delighted to receive strong support from Dr Daniel Tillett and Angus Walker, who recognise the potential in our programs.

“We are also grateful to Bill Garner, Jason Carroll, and Chris Ntoumenopolous for their participation.

He said the company was now funded through several important inflection points, including data readouts on our ISLA-101 Phase 2a/b clinical trial, known as PROTECT.

Tillet said he had been invested in Island for many years and had been closely watching its progress.

“Island's impressive clinical development of ISLA-101 and recent expansion into new antivirals creates a compelling investment opportunity,” he said.

“The ability to leverage historical data to advance overlooked antivirals in areas of unmet need, combined with the potential acquisition of two priority review vouchers, is highly attractive.

“I’m pleased to further support Island and help fast track the clinical development of their assets.”

Dosing starts in groundbreaking dengue trial

Meanwhile,  ILA has dosed all subjects in the Phase 2a component of its ISLA-101 Phase 2a/b PROTECT clinical trial for dengue fever.

The company said this was the first time a potential countermeasure to combat the dengue virus, which afflicts more than 400m individuals annually and for which there is currently no therapeutic option, was being investigated as both a preventative and therapeutic measure in a single study.

ILA said the study employs a cutting-edge clinical trial design that capitalises on years of research by the US Army to develop an attenuated strain of the dengue virus.

“This strain can be used to examine a dengue infection in a highly controlled setting, with the challenge virus causing a mild but clinically relevant dengue infection in the enrolled subjects,” ILA said.

The company’s trial design is a randomised Phase 2a/b human challenge study that includes both a prophylactic (preventative) and therapeutic arm split across two cohorts.

Phase 2a is a prophylactic arm that will include four subjects randomised 3:1 (active: placebo).

Phase 2b is a therapeutic arm that will include 10 subjects randomised 8:2 (active: placebo).

Following dosing, the four subjects in Phase 2a would be administered an attenuated strain of dengue fever on October 4, 2024.

“From the date of infection, symptoms of all trial subjects will be monitored for 90 days, during which investigators will study the viremia curve for each subject and a range of other symptoms regularly associated with dengue fever,” ILA said.

Data from the Phase 2a study is expected well before the end of 2024, and ILA anticipates commencing the Phase 2b therapeutic arm of the study in early 2025.

‘Pivotal moment for Island’

Foster said the company was now weeks away from understanding the potential impact of our drug ISLA-101 on dengue fever.

“Dosing the Phase 2a subjects in this powerful Phase 2 PROTECT clinical trial was a “pivotal moment for Island,” he said.

“As the first company in the world to investigate an agent as both a prophylactic and therapeutic against dengue in a clinical setting with a challenge virus, we are proud to be conducting this innovative trial to find a preventative and/or treatment for this devastating virus at a time when infection rates are rapidly growing around the globe.”

This article was developed in collaboration with Island Pharmaceuticals, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

Originally published as Island lifts 50pc on $3.5m capital raise and Phase 2a/b dengue trial progress