Intec Pharma Ltd (NASDAQ:NTEC) entered a pact with Aspire Capital Fund to mobilize $4.9 million by issuing 7.125 million ordinary shares under a purchase and sale agreement at $0.3511 each share. Aspire agreed to buy pre-funded warrants of 7.125 million at $0.3411. Intec will close the deal on or before August 10, 2020.
For R&D and working capital needs
Intec will use the funds mobilized through direct registered offering for research and development, general corporate expenses, and working capital needs. The company offers pre-funded warrants and shares under the Form S-3 filing with SEC on March 1, 2019.
Reports net loss
Intec narrowed down the loss to $2.9 million in Q2 2020 from $10 million in Q2 2019. It is on the backdrop of a decline in general and administrative expenses and R&D costs. At the end of Q2 2020, Intec holds a cash balance of $13.8 million.
Intec lowered general and administrative expenses by $500,000 to $1.6 million in Q2 2020. The company reduced spending on R&D by 84% to $1.3 million in Q2 2020.
The companies engaged in discovering new treatments usually burn cash over the years. They usually achieve success over some time to provide a better drug to treat complicated health conditions. Intec is debt-free in March 2020 and holds a cash balance of $11 million. It spent $28 million in 2019. The current cash position lasts roughly five months. Therefore, Intec needs to spend its cash prudently to achieve its targeted growth.
The clinical-stage biopharmaceutical company – Intec develops drugs using its AP (Accordion Pill) Technology. Intec developed AP technology to facilitate drug delivery orally. It helps to improve the safety and efficacy of the drugs under development and existing drugs as well.
The drug delivery system – Accordion Pill utilizes biodegradable polymeric films, which holds active ingredients and drugs. It then folds the films into an undulated shape to place them in a capsule.
AP technology allows slow delivery of the drug into the stomach and promotes steady absorption. Therefore, the pill gets dissolved in the GI tract to provide the desired health benefits.