Destiny Pharma is latest to leave London in pursuit of private funding

Biotech business Destiny Pharma has become the latest firm to de-list from the London Stock Exchange after it said it would have access to a “larger pool of capital” as a private company.

The Brighton-based firm, which has been seeking a licencing partner for the development of XF-73 Nasal, a breakthrough gel to prevent postoperative infections, said it would leave the AIM market after seven years.

Destiny Pharma bosses said they believed that delisting would give it a “realistic chance” of securing the funding needed to progress XF-73 Nasal through clinical trials.

Sir Nigel Rudd, chairman, said: “As previously disclosed, the company has been seeking a licencing partner for the development of XF-73 Nasal through Phase 3 clinical trials.

“However, to date a deal has not been forthcoming and given our cash runway, the board and our advisors have been evaluating a range of strategic options to access the significant quanta of funding required to progress the drug through these Phase 3 clinical trials and realise the creation of meaningful shareholder value.

“This review, and our discussions with possible funding partners, has identified that a larger pool of capital may be available to Destiny Pharma as a private company and therefore, the board has concluded that delisting from AIM and re-registering as a private company is a necessary step to provide Destiny Pharma with a realistic chance of securing the capital required to progress XF-73 Nasal through clinical trials and bring this important product to patients and health systems.

“In summary, while there can be no guarantee, the board believes that the only viable option now available to Destiny Pharma to create future shareholder value is the pursuit of capital as a private company. Without taking this route, we believe that liquidation of the Company is the most likely alternative.”

Chris Tovey, CEO, added: “I continue to believe that XF-73 Nasal could be a highly differentiated drug for patients to prevent post-surgical site infections. XF-73 Nasal has substantial market potential and represents an attractive commercial proposition that, if progressed through late-stage clinical development, could create considerable shareholder value.

“Since I joined the company, not only have we been vigorously pursuing a potential licensing deal, we have also taken important steps to improve the attractiveness of XF-73 Nasal to potential partners.

“This includes optimising the clinical trial design, reducing the overall cost to less than half of the previously planned Phase 3 trial, and further strengthening the market research supporting the blockbuster potential for XF-73 Nasal in the United States.

“Although we continue to speak to partners about this renewed proposition, we are extremely disappointed that a deal has not been forthcoming and, given our shortening cash runway, have been forced to amend our strategy as we seek to continue to progress this important product.”