Australia | Mar 23 2007
By Rudi Filapek-Vandyck
Capital raisings are not always bad news. Take biotech Avexa (AVX) as an example.
The company announced it will raise $75m through a 2 for 5 rights issue, valued at $0.53. It did not stop its share price soaring to near $1 as another positive test result for its apricitabine (ATC) product sees the company making a significant step forward in providing treatment of HIV infection in patients with drug-resistant HIV.
Next stop is a Phase 3 clinical trial. Avexa shares did lose 16.5c or nearly 17.5% on Friday morning as, we guess, investors decided to take some profits ahead of the weekend. Avexa shares were at $0.78 at noon.
Another recent star performer, high techie Arasor International (ARR) is currently seeking to tap into the market’s liquidity as well following some large orders from China and India which require additional investments. Arasor is seeking to raise $30m and is offering scrip at $3.05 while its shares are trading at $3.33.
Don’t expect any long lasting pullbacks, however, because the word on the street is that demand for Arasor shares has exceeded the offer in multiples already. The offer is still open until 3.30pm today.
Apparently, one of the existing shareholders has offered to take up the complete placement, but that would mean having to disappoint everybody else, so a gentle “no” has been returned.