On Thursday, the company said it had raised the funds in a heavily oversubscribed fundraising through the issue of 40mln new shares at a price of 35p each, a 32% discount to its closing price on Tuesday, the day before the placing was announced.
Synairgen added that certain directors of the company have conditionally subscribed for 214,285 new shares concurrent with the placing.
The funding took place via firm and conditional placings carried out on Wednesday through a bookbuild by broker finnCap.
"We are delighted with the support for this financing which will enable us to assess SNG001's effectiveness in [coronavirus] patients. A successful outcome from the trial would be a major breakthrough in the fight against coronavirus and a significant value-enhancing event for Synairgen and our shareholders. Our wholly-owned drug, SNG001, has already been well-tolerated in clinical trials in more than 200 respiratory patients to date and has accelerated lung function recovery in two Phase II asthma trials in patients with a cold or flu infection", said Synairgen chief executive Richard Marsden.
The clinical trial started on 50 patients at a hospital in Southampton this week and as well as providing cash for that, the money will also pay for the manufacture of the drug, SNG001.
SNG001 is an inhaled formulation of interferon-beta-1a and is currently being developed to treat people with chronic obstructive pulmonary disease (COPD) that also have respiratory viral infections.
Synairgen’s share price has risen to 46.5p from 10.75p at the start of February as the possibility of SNG001 as a treatment for people with serious lung complications was appreciated by investors.
Talking to Proactive recently, Marsden said that interferon beta - a cytokine - is the first thing the body throws at a virus when it recognises one and it is effective against lots of different viral types.
Synairgen’s treatment is a formulation of interferon beta delivered by a nebuliser designed to protect the lungs of patients with COPD from exacerbations such as coronavirus.
It is especially important with people with pre-existing conditions, says Marsden, as by that stage the lungs are compromised too much to cope with any additional complications.
In a note, analysts at 'house' broker finnCap introduced a 120p target price on the firm, saying the company's risk/reward profile was "skewed significantly to the upside" and that a successful outcome from the pilot phase of SNG001 will have "substantial commercial value".
"It is clear from the equity market’s positive reaction to [coronavirus] clinical events...that the market potential is enormous. With c.1 in 6 coronavirus-infected patients becoming severely ill, the potential number of treatments rises into the 100ks, creating a potential US$1bn+ product opportunity", finnCap said.
The company's shares were 5.5% lower at 44p in early deals on Thursday.
-- Adds result of placing, share price, broker comment --