What happened to NRT’s share price?
Australian biotech company and anti-cancer drug developer, Novogen Limited’s [ASX:NRT] share price fell 29.5% today.
The Sydney based company also trades on the NASDAQ as ‘NVGN’. The US-listed stock gained 21% last night.
Why did Novogen shares fall here but rise in the US?
The share price rose in the US overnight after the company said it would issue approximately AU$15.5 million in new shares to US institutional investors.
The company raised the funds to ‘provide a runway for our 3 lead oncology candidate drugs’, for which, ‘we might expect to see objective evidence of clinical benefit.’
Understandably, Australian investors were not so keen on the news, and sold down the stock.
What now for Novogen Limited?
In addition to the AU$15.5 raised from US institutional investors, Novogen also plans on raising another AU$15 via a 6-for-1 non-renounceable rights issue to existing shareholders.
The Rights Issue will be open to eligible shareholders who hold shares as at 1 May. The issue price is AU$0.30, representing a 10% discount to the five day average share price leading up to Friday 17 April.
Novogen CEO Graham Kelly, said, ‘The Company is about to enter a significant growth phase. The last two years have been about laying the groundwork with our two technology platforms. That work has brought us now to a position of being in a position to exploit the considerable opportunities that those two proprietary drug technology platforms offer.’
for The Daily Reckoning Australia