Novogen shares went into free fall after the Australian biotech announced a $15.5 million capital raising from a private placement with institutional investors in the US.
Current shareholders will also be offered a 1 for 6 non-renounceable rights issue offering of fully-paid ordinary shares to raise another $15 million.
The $30 million plus cash will be used to fund the company’s growth and development of anti-cancer drugs.
CEO Graham Kelly says the last two years have been about laying the groundwork with 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,” he says.
The company also announced that pre clinical trials have show that its experimental anti-cancer drug Cantrixil can prevent ovarian cancer tumours from coming back in mice.
Novogen’s share were trading at $0.29, down 30%.