Scancell has announced that it has raised £3.877m (gross) through the issue of 77.6m new shares to Vulpes Life Sciences Fund at a price of 5p per share. The new investment results in Vulpes holding 16.67% of the enlarged share capital, overtaking Calculus Capital as the largest shareholder.
Vulpes Investment Management has a track record of identifying underappreciated life sciences companies and then taking sizeable stakes. Importantly, they are supportive long-term holders. Martin Diggle, a founder of Vulpes in 2011, will join the Scancell board as a non-executive director.
The funds help extend Scancell’s cash runway, but it should be noted that the cash burn is expected to rise as it enters the more expensive clinical stages; our forecast is detailed in our Initiation note of November 2018.
It is worth highlighting that Scancell has two promising technology platforms for therapeutic vaccines that have the potential to treat many cancers, either as monotherapy or in combination with checkpoint inhibitors.
We feel that the timely development of these programmes has been hindered historically by financial issues. We view the Vulpes investment as a comforting sign that funding concerns appear to be being overcome.