Medigene files to raise €50M to hit gas on T-cell R&D programs

Medigene (ETR:MDG1) is preparing to ratchet up investment in T-cell receptor (TCR) R&D programs. The plan is to raise up to €50 million ($56 million), funnel the cash into R&D programs and create a pipeline of up to 10 TCRs.

Medigene CEO Frank Mathias

Munich, Germany-based Medigene sat on €13 million in cash at the end of March, a figure it plans to swell significantly by issuing new shares. The newly inflated bank balance will go toward an amped-up R&D program, the main objectives of which will be to create 10 TCR candidates and investigate them in three clinical trials. Up to €43 million of the fundraising haul is earmarked for the TCR push, giving Medigene the financial might to start to properly assess the merits of the platform it picked up in the 2014 takeover of Trianta Immunotherapies.

The acquisition is central to the next phase of Medigene's topsy-turvy history, in which it spun out assets to form Adaptimmune ($ADAP) and then had to watch on as the Oxford, U.K.-based biotech took a seat at the immuno-oncology top table. Medigene thinks the Trianta platform can elevate it to such heights by generating specific TCRs for a wide range of tumor antigens. If the idea works as Medigene hopes, it will be able to arm the immune systems of patients to identify and attack a variety of cancers.

Whether this approach works in the clinic--and how Medigene's take on the idea compares to the competition--are major outstanding questions. Medigene's investors are being asked to bankroll the search for answers to such questions yet again, almost exactly 15 years after they were first tapped for cash in an IPO. The German biotech will find out how willing investors are to finance the start of another long slog through the clinic when the subscription period for new shares closes later this month. Existing investors are being offered two new shares for every five they already hold.

If existing investors fail to snap up all of the available stock, Medigene will put the remaining shares to institutional investors as private placements. Surging investor interest in immuno-oncology stocks has driven Medigene's shares up more than 100% in 2015 and put it in a position to aim to pull in €50 million. That fundraising target is based on the maximum per share cost of the offering--€9.50--a figure it is trading well below, mainly because the stock dropped by 10% in the two days following news of the fundraising. At the current share price Medigene would raise around €45 million. 

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