TruScreen to raise up to $4 mln to fund Chinese expansion

Wednesday 20th May 2015

NZAX listed TruScreen will seek to raise up to $4 million to ramp up manufacturing of its single use sensors as it targets China with its cervical cancer screen system having recently won regulatory approval to service the world's most populous nation.

The Auckland based company wants to raise between $3 million and $4 million through a private placement to institutions and eligible shareholders and a share purchase plan to existing investors, and will go on a roadshow in New Zealand and Australia over the next week, it said in a statement. The capital raising plans come after it said yesterday it has entered into a joint initiative with the China Doctors Association and its principal Chinese distributor, Beijing SiweiXiangtai Tech Co, to run a screening programme spanning 100,000 people in 100 hospitals over the next 12 to 14 months. That deal was hot on the heels of TruScreen winning regulatory approval to sell its product into China by the China Food and Drug Administration.

"This development has opened up significant commercial opportunities for TruScreen and for its commercial distribution partners in China," the company said. "In order to maximise the commercial opportunity to market and distribute TruScreen's product, primarily in China, but also in a number of other jurisdictions, the board of the company considers that it is appropriate for the company to engage in a capital raising initiative."

TruScreen listed on the NZAX last November in a compliance listing, having already raised $6.07 million in the lead-up to going public. That private placement was to acquire the intellectual property and business assets of the business and provide working capital to fund the commercialisation of the product.

The company today said it hasn't set a price for the private placement or share purchase plan, but expects it will be close to the market price in the period immediately before the completion of the capital raise.

The shares last traded at 30 cents apiece, valuing the company at $43.3 million, three times the 10 cents issue price when it listed last year.

The funds will go towards increasing production to meet the demands of its distribution partners, set up tooling and manufacturing facilities for the new model of its TruScreen device, stockpile inventory, invest in research and development, conduct clinical trials, and invest in sales and marketing.

BusinessDesk.co.nz

Comments from our readers

No comments yet