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- Race Oncology (RAC) has entered a trading halt ahead of a share placement to strategic investors
- In mid-June, Race reported a 40 per cent response rate in patients with relapsed or refractory acute myeloid leukaemia during its phase two trial of bisantrene
- Based on the success, Race is planning on further clinical trials to treat various cancers later this year
- Around the same time, the company extended the repayment period for former Managing Director and CEO, Dr Peter Malloy, to pay $800,000 worth of loan shares
- If shareholders approve, Race will buy back over 2.2 million loan shares out of the original four million at 36 cents each per buy-back-share
- Once the buy-back has been completed, the loan will be considered fully repaid
- Race intends to hold a shareholder general meeting and implement the buy-back later this month or in early August
- Company shares last traded for 77.5 cents each on July 8
Race Oncology (RAC) has entered a trading halt ahead of a share placement to strategic investors.
Race Oncology is an Australian-based specialty pharmaceutical company with a focus on developing drugs to treat cancer.
In mid-June, Race reported impressive results from a phase two clinical trial which was testing its chemotherapy drug, bisantrene, on subjects with acute myeloid leukaemia.
The trial was conducted at Israel’s Sheba Medical Centre and returned a 40 per cent response rate in patients with relapsed or refractory acute myeloid leukaemia.
Race is planning to conduct further clinical trials of bisantrene to treat acute myeloid leukaemia, breast cancer and ovarian cancer later this year.
Additionally, the company’s former Managing Director and CEO, Dr Peter Malloy, resigned in May, which sparked the revival of a share and loan offer letter dated May 8, 2016.
Background
Dr Molloy was issued four million fully paid ordinary shares in the company in relation to Race’s initial public offering and listing on the ASX. The shares were issued at 20 cents each and were funded through a limited recourse loan of $800,000 from Race under the share and loan offer letter.
As he resigned on May 20, Peter originally had until May 27 to repay the $800,000 worth of loan shares under the terms of the offer letter and the voluntary restriction and share buy-back deed dated July 13 2016.
Repayment
However, on May 28, and again on June 16, Race agreed to extend the repayment date so that the loan will be repaid through a buy-back and cancellation of $800,000 worth of loan shares. This is subject to shareholder approval.
If approved, Race will buy back 2,222,222 loan shares at 36 cents each per buy-back-share. This represents the five-day volume-weighted average price up to and including May 18.
Once the buy-back has been completed, the loan will be deemed to have been fully repaid and Race will lift the ‘holding lock’ on the remaining 1,777,778 loan shares that Peter held.
The company plans to hold a general meeting for shareholders and implement the buy-back later this month or in early August.
Company shares last traded for 77.5 cents each on July 8.
