Midatech raises £10m to continue formulation development

Drug delivery technology company Midatech Pharma has raised £10m before expenses, it announced on Tuesday, to continue its formulation development work.

The AIM-traded firm said the funds were raised through a placing to UK investors of 35,087,720 new shares at a price of 28.5p each, which brought new UK institutions into its shareholder base.

It noted that the issue price represented a discount of about 12.3% to the closing middle-market price of 32.5p per existing share on 28 June, with the placing shares representing 35.6% of its enlarged issued share capital.

The proceeds of the placing, net of fees and expenses, were expected to total around £9m.

Midatech said it would use those proceeds to develop additional mAb formulations to the proof-of-concept stage using its ‘Q-Sphera’ technology, following the success with the exemplar mAb it announced on 17 June.

It would also add new small-molecule Q-Sphera programmes to its internal pipeline, initiate a phase 2 clinical study of ‘MTX110’ in DIPG, initiate a pilot phase 1 clinical study of ‘MTX110’ in GBM, and use the rest of the proceeds for general corporate purposes.

Taking into account available cash resources and the expected net proceeds, the company said it expected to have sufficient cash resources to fund operations into the first quarter of 2023.

“It has been a busy 13 months since we announced our strategic review and restructuring,” said chief executive and chief financial officer Stephen Stamp.

“On 17 June we announced progress in our research and development pipeline across multiple programmes, and breakthrough data on the successful encapsulation of a large molecule protein with Q-Sphera - a world's first.

“Today's announcement of the placing gives us the runway to initiate phase 2 and 1 clinical studies of MTX110 in DIPG and GBM, respectively.”

At 1542 BST, shares in Midatech Pharma were down 6.15% at 30.5p.