Drug repurposing biz Paradigm Biopharma preps raise; taps Bell Potter

afr.com:

Here’s one for investors on the hunt for potential bargains in the battered biotech sector.

Paradigm Biopharma is among Monday’s equity raising candidates.  Louise Kennerley

Street Talk can reveal Paradigm Biopharmaceuticals, an ASX-listed drug repurposing business, had its broker Bell Potter wall-crossing investors over the weekend for a potential capital raising.

Fund manager sources said Paradigm and Bell Potter were building support for a $30 million equity raising, which was split across an $18 million placement and a $12 million rights issue. Prospective backers were being offered Paradigm shares at 43¢ apiece, which would represent a 30 per cent discount to the last close on Friday. It included a three-for-four option which would be listed and have a 65¢ strike price to a two-year expiry.

The company, founded in 2014 by former CEO Paul Rennie, is hoping to commercialise a new treatment for knee osteoarthritis by repurposing existing drug pentosan polysulphate sodium (PPS), which historically had been used as a mild blood thinner.

Sources said Paradigm had the deal all but covered on Sunday afternoon. The stock was expected to be halted from trading on Monday, ahead of the deal’s official launch.

Paradigm is rattling the tin after two recent announcements touting progress of its work. In a nutshell, it’s told investors that it has developed the first osteoarthritis drug to show durability of effect going out 12 months, as well as the first osteoarthritis drug that has demonstrated it can grow back cartilage in the knee.

Potential backers were told the company is on track to deliver the results of its Phase 3 study, looking at its use for pain and function in knee osteoarthritis, in mid-2025. It expects to be funded