Cellmid placement raises $6 million to roll-out rapid diagnostic tests for COVID-19, shares jump

Cellmid Limited (ASX:CDY) has jumped 40% after raising $6 million before costs via a well-supported share placement to new and existing sophisticated and institutional investors. The placement will result in the issue of approximately 27.3 million fully paid ordinary shares at 22 cents each, representing an 18.5% discount to the closing price on April 1, 2020, of 27 cents, and a 32% discount to the 30-day VWAP of 33 cents. Cellmid will rely on the ASX Class Waiver Decision dated March 31, 2020, to undertake the placement. The company will also provide the opportunity to existing shareholders to participate in the capital raising via a share purchase plan (SPP) targeting an additional $1 million at the same price as the placement. Shares higher Shares today are more than 40% higher at 38 cents, up from 8.3 cents on March 18. Of the total shares issued under the placement, 17% will be issued to directors Dennis Eck ($950,000) and Maria Halasz ($50,000), subject to approval at an upcoming general meeting of shareholders. The placement was managed by Evolution Equities who, in return for their services, will receive a 4% placement fee, 2% management fee and 1 million unlisted options expiring two years from the date of issue and exercisable at 30 cents per option. Issue of the options will also be subject to shareholder approval and if Evolution assists with placing any shortfall in the SPP they will receive a fee of 6% of the SPP shortfall funds raised. Combatting COVID-19 Proceeds from the placement and SPP will be used to fund the roll-out of the SARSCoV-2 diagnostic tests and general working capital. The company recently announced it will supply rapid diagnostic tests (RDT), with products expected to arrive in the country early this month. This test uses a virus-specific detection method that delivers results anywhere between three to 15 minutes and requires no laboratory equipment It also does not require the use of Polymerase chain reaction (PCR) equipment, which is one of the limiting factors in wide-scale testing. The Australian pathology system is also limited by the lack of reagents and the rapid tests may help remove this bottleneck.