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Allarity Therapeutics to Receive $20M in Securities Purchase Agreement With 3i Fund

NEW YORK – Allarity Therapeutics said on Friday it has entered into a securities purchase agreement with 3i Fund, which will invest $20 million to support the reorganization and US relocation of the clinical-stage firm.

The firm, currently based in Denmark, will reorganize into a US holding company with operations on the US East Coast, called Allarity US, and apply to be listed on the Nasdaq market in the US. Once publicly listed, the company will receive the $20 million investment from 3i, which will receive convertible preferred stock in the deal. Allarity is expected to be valued at around $100 million once the investment is made.

Under the reorganization, Allarity's US corporation will purchase all of the assets and assume all of the liabilities of Denmark-based Allarity in exchange for shares of common stock of Allarity US. 3i will also be eligible to purchase an additional $20 million worth of Allarity stock at a fixed conversion price that will be determined upon completion of the recapitalization.

By June 5, Allarity will file with the US Securities and Exchange Commission the shares of common stock to be issued in the recapitalization and apply to list the shares on the Nasdaq upon completion of the recapitalization. Allarity is hoping to be publicly listed by or before Aug. 30, 2021.

Once the recapitalization is completed, Allarity will no longer be listed on the Swedish First North Growth Market. It will be headquartered in the US, and its Denmark location will be an R&D center.

"The transition of our company from a Scandinavian microcap stock market listing to the US Nasdaq, which we have been exploring through a number of paths over the past two years, is a major catalytic event for Allarity," CEO Steve Carchedi said in a statement. "We believe this step will enhance our ability to achieve market values more in line with our US Nasdaq listed peer group, and secure the necessary financing for our future success with greater participation by institutional investors who primarily invest in US listed companies."

Specifically, the company said that the committed funds will help it advance its pipeline of precision oncology drugs and companion tests. Allarity has three lead precision oncology candidates in its pipeline including dovitinib, a pan-TKI inhibitor that it acquired from Novartis; stenoparib, a PARP inhibitor it acquired from Eisai; and ixabepilone (Imprexa), a microtubule inhibitor it acquired from R-Pharm US.

Allarity is also developing a drug-specific companion diagnostic for each therapeutic candidate using its proprietary Drug Response Predictor (DRP) diagnostic platform, which relies on messenger RNA from patients' biopsies to gauge their likelihood of responding to a variety of drugs. In April, Allarity submitted a premarket approval application to the US Food and Drug Administration to use its DRP companion diagnostic alongside dovitinib to identify a biomarker-selected population of kidney cancer patients.