Cogstate Ltd. said it raised A$2.9 million through a placement of its ordinary shares with Japanese drugmaker Eisai Co. Ltd.
The placement will be conducted in two tranches. In the first tranche, the Australian healthcare technology company will issue a total of 6.7 million ordinary shares at an issue price of 20.308 cents per share to raise a total of about A$1.4 million.
The second tranche entails a further placement with Eisai to raise A$1.5 million at an issue price equal to the volume-weighted average price of the company's shares over the five days prior to, but not including, the date of issue of the shares. Subject to shareholder approval, the issue of shares under the second tranche is scheduled for October, or within 5 business days following the company's annual meeting.
Funds raised under the share placement will be used to support the launch of Cogstate technology in Japan under a license deal with Eisai. Under the deal, Eisai will pay Cogstate an up-front royalty payment of US$1 million, will fund development activities to tailor the technology for Japanese users and fund a commercial team in Japan.
Cogstate also said it plans to use part of the proceeds to advance its technology — including development and validation of mobile applications — and to fund general working capital requirements.
Meanwhile, considering the dilutive nature of the company's placements to Eisai and the capital needs of the company, Cogstate's board is considering a potential entitlement offer to raise up to about A$3 million. Other details regarding the offer are still being developed by the company's board.
Cogstate provides computerized cognitive tests for clinical trials, research and brain injury applications.
