Diurnal Group launches placing and open offer to fund drug development

Specialty pharmaceutical company Diurnal Group announced a conditional placing of new ordinary shares in the company and the launch of an open offer on Tuesday, in order to raise funds to progress the development and commercialisation of its products.

The AIM-traded firm said it had conditionally raised around £5.35m before expenses by the placing of 20,576,924 placing shares, at a price of 26p each.

It said it was also making an open offer, for up to 3,857,617 million new ordinary shares, to raise up to approximately £1m, on the basis of one open offer share for every 16 existing ordinary shares held by qualifying shareholders at the record date.

The open offer would provide qualifying shareholders with the opportunity to subscribe for new ordinary shares up until 13 June.

It said the net proceeds of the placing and open offer would be used to progress the development and commercialisation of Diurnal's products, including filing a market authorisation application (MAA) for ‘Chronocort’ in Europe by the end of 2019.

They would also be used to file a new drug application (NDA) for ‘Alkindi’ in the US by the end of 2019, and continuing the development of the European commercial organisation and roll-out of Alkindi in Europe to maximise revenues.

Finally, it would be used to progress licensing discussions for Alkindi and Chronocort in the US and the rest of the world.

The board said the placing price represented a discount of about 16.1% to the mid-market closing price of its ordinary shares on 24 May, being the last practicable date prior to the date of its announcement.

Diurnal said the placing and open offer remained conditional on, amongst other things, the passing of the resolutions to be considered by shareholders at a general meeting on 14 June.

“Diurnal has continued to make strong progress across its business, including the successful launch of Alkindi in Europe and confirmation of the regulatory paths for Chronocort in Europe and Alkindi in the US, where regulatory submissions are planned for the fourth quarter of 2019,” said chief executive officer Martin Whitaker.

“The funds raised will allow us to progress our vision of becoming a world-leading specialty pharma company in endocrinology, in particular to support the commercial infrastructure for the further roll-out of Alkindi in Europe, paving the way for the expected future launch of Chronocort, and to secure partnerships for Alkindi and Chronocort outside of Europe.”