Mologen files to raise €16M to extend runway past TLR9 agonist clinical trial readouts

Mologen (ETR:MGN) is seeking to raise €16 million ($18 million) through an issue of new shares and a convertible bond. The biotech plans to use the money to carry out its recently revamped strategy, the centerpiece of which is a suite of trials of its TLR9 agonist in patients with colorectal cancer, small cell lung cancer and HIV.

Berlin-based Mologen is planning to raise most of the cash through an issue of shares. With more than 11 million shares available at €1.20 a pop, the capital increase is set to add €13.5 million to Mologen’s bank balance. Existing investor Global Derivative Trading (GDT), which owns 24% of Mologen going into the capital raise, and new Chinese backer Towercrest have committed to buying some of the shares. GDT will at least maintain its stake, while Towercrest will emerge owning 10% of Mologen.

With Mologen looking to supplement the money raised through the issue of shares with €2.5 million from a convertible bond, the financing actions will generate €16 million, more than the company had in cash as of the end of June.

Mologen burnt through money at the rate of €1.5 million a month over the first 6 months of 2016, and it forecast the €15.3 million it had at the last count to see it through to the start of next year. The financing actions will extend that runway out to the end of 2017, setting Mologen up to deliver data from two of the four ongoing clinical trials of its TLR9 agonist lefitolimod.

Data from a Phase II small cell lung cancer trial are due to drop in the first half of 2017, with a readout from a Phase I HIV trial scheduled to follow later in the year. With Mologen stepping up its hunt for a licensing deal earlier this year, those data could provide a fillip--or torpedo--its ambitions.

In the longer term, the fate of lefitolimod is tied to a pivotal trial of patients with metastatic colorectal cancer. The trial, which got underway in 2014, is due to finish enrolling the last of its 540 patients around the turn of the year. Analysis of the data will begin when a certain number of deaths have occurred in the clinical trial, something Mologen anticipates will happen roughly two years after it completes enrollment.