Botanix Pharmaceuticals announced a placement of $40 million from US biotech funds today, along with making key appointments to its managment team.
Botanix Pharmaceuticals Limited (ASX:BOT)—a clinical stage cannabinoid company—has received firm commitments for a $40 million placement led by specialist US-based biotech investment funds and leading US institutional investors.
The $40 million in funding—which was offered at a price of $0.21 per fully paid ordinary share—will be used to support the company's cannabinoid clinical development and research portfolio.
In aid of this, Botanix also appointed several highly experienced dermatology executives to key management positions, to support further expansions of development programs and lead commercialisation efforts in the US.
The placement of $40 million is a big win for Botanix, as it will fully fund the completion of its Phase 2 studies—and the subsequent supportive studies required prior to Phase 3 trials—for its acne and atopic dermatitis drugs, allowing the company to accelerate its broader commercial strategy.
Additionally, the funding will also provide the company with further financial backing to take its first antimicrobial program into clinical studies.
"The recent release of data from multiple studies has generated an exceptional level of interest globally. This has created an opportunity for the Company to further understand the applications of cannabinoids in skin diseases. The support from leading US institutional investors with significant dermatology and pharmaceuticals investment track records enables Botanix to advance to the next level."
-Executive Chairperson and President of Botanix, Vince Ippolito
However, this was also huge news for investors, as the presence of US biotech funds will serve to further validate the value of both Botanix Pharma, and the market as a whole.
And it's not hard to see why, as the US biotech space is currently red hot—despite its reputation for "high-risk returns"—with more than $20 billion reportedly invested in ETFs, while another $40 billion has already been poured into mutual funds.
As a result, the involvement of US biotech funds—with Cowen and Company LLC acting as the lead placement agent—will likely go a long way in legitimizing Botanix Pharmaceuticals position in the market to potential investors, while also helping to stabilise its share price volatility.
Upon completion of the placement, the company will issue 190,476,191 shares at an offer price of $0.21, representing a 16.7% discount to the 15-day VWAP of $0.252.
But, the good news doesn't stop there, as the company has also strengthened its leadership team with the appointment of Richard Peterson to the role Chief Financial Officer (CFO), while Howie McKibbon became the Chief Commercial Officer (CCO).
These appointments could prove crucial to the future success of Botanix Pharmaceuticals, as here at The Green Fund we believe that a cannabis company is only as good as the management team behind it.
Luckily for investors, both Peterson and McKibbon have extensive experience in the US pharmaceutical industry, which will enable them to provide significant commercial knowledge, industry expertise, and forward-thinking leadership to help drive the company's next stage of development.
As Botanix's new Chief Financial Officer, Peterson brings years of experience in the dermatology industry to the role, having previously held the position of CFO at Dermavant Sciences. During his time there, Peterson also oversaw a diverse range of responsibilities in the company, including finance, company secretarial and operations.
"Ric [Richard] and Howie are great additions to the team and bring a wealth of knowledge and industry experience to Botanix. The strong cash position and robust pipeline, coupled with the recently expanded management team, puts Botanix in a solid position to progress its development strategy and explore other strategic opportunities."
– Executive Chairperson and President of Botanix, Vince Ippolito
"Securing the services of both Ric and Howie is a testament to Botanix's impressive progress with conservative expenditure of resources over three short years and highlights the potential of its exciting cannabinoid portfolio," Ippolito said.
Prior to this, Peterson had also served as the CFO at several other dermatology companies, including Sienna Biopharmaceuticals, Novan and most notably Medicis Pharmaceutical, where he played a key role in first building the company, and then negotiating its eventual sale to Valeant for $2.6 billion in 2012.
And McKibbon is no slouch when it comes to experience with the pharmaceutical industry either, having already been employed in the field for more than 20 years. Most recently he served as the Senior Vice President (SVP) of Worldwide Commercial Operations for Dermavant Science, and prior to this he worked as the SVP of Sales and Marketing at Anacor Pharmaceuticals.
Aside from this, McKibbon has held commercial leadership positions for neuroscience and oncology brands from development to exclusivity at Cephalon and Wyeth, and was also the former VP of Dermatology and Immunology at Medicis Pharmaceuticals.
Over the course of his career McKibbon has launched 11 dermatology products and managed over 30, while also playing a significant role in two dermatology transactions that had a combined valuation of $7.8 billion.
As a result of these factors, we are very bullish about the chances of Botanix Pharmaceuticals going forward, as the company now has the necessary combination of financial backing and managerial experience needed to shake up the market.
We expect to see big things from Botanix Pharmaceuticals, and predict significant movement from the stock in future. All in all, it seems like there's never been a better time to jump on the Botanix bandwagon.
The only thing to do now is decide whether or not you want to come along for the ride.