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Paradigm Biopharmaceuticals raising $77.9 million to fund its pivotal phase 3 OA trial

In conjunction with the capital raise, Paradigm has revealed that it has successfully met the primary and secondary endpoints of its phase 2b trial in OA of the knee.
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Funding will put the company in a strong negotiating position for commercial transactions

Paradigm Biopharmaceuticals Ltd (ASX:PAR) has launched a $77.9 million capital raise to fund its pivotal phase 3 OA clinical trial in the US, EU and Australia.

The funds will also be used to complete the phase 2/3 pivotal clinical trial in MPS.

The offer comprises a $51.6 million placement to professional, institutional and sophisticated investors across Australia, Asia and the US including some existing shareholders.

Paradigm is also raising $26.3 million via an underwritten 1 for 8 accelerated non-renounceable entitlement offer to eligible shareholders.

Proposed use of funds

In conjunction with the capital raise, Paradigm has revealed that it has successfully met the primary and secondary endpoints of its phase 2b trial in OA of the knee.

Paradigm will have a cash position of $82 million post the capital raising which will put the company in a strong negotiating position for commercial transactions.

Placement and entitlement offer

The placement will result in the issue of 34,370,099 shares and the entitlement offer will result in the issue of 17,537,431 shares, at an offer price of $1.50 per share.

The offer price represents a 21.1% discount to last close on April 10, 2019.

Settlement of the placement and institutional entitlement offer is expected to occur on April 24, 2019 with new shares allotted the trading next day.

The retail entitlement offer is expected to close on May 6, 2019.

Indicative timetable

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