LungLife AI raises £17m as it makes its debut on AIM
On its first day of dealings,successfully raised gross proceeds of £17 million at a price at 176p, valuing the company at £45 million upon its admission to AIM.
The London-listed company develops AI-enhanced clinical diagnostic solutions that are specifically designed to make a significant impact in the early detection of lung cancer.
Upon its admission this morning, the firm had 25,480,790 common shares in issue and free float of approximately 50.6%, thereby giving it a market capitalisation of around £45 million.
The Company believes that raising money in a public market will enable the firm to advance its clinical development and commercialisation plans as well as supporting in-licensing of additional technologies or selective acquisitions as may be appropriate in the future.
Addressing shareholders on its first day of dealings, Paul Pagano, CEO of LungLife, said: "We are delighted with the strong support shown by new institutional investors for our fundraise and we are very proud to complete our admission to AIM, which is a key milestone in the advancement of our AI-enabled LungLB® test for early lung cancer detection.”
The Directors said the £17m proceeds will enable the group to complete its validation study and commence a subsequent utility study of the LungLB® test for indeterminate lung nodules. The Company expects to launch its AI-enhanced, blood-based test LungLB® in 2023.
The LungLB® test, which integrates the Company’s core technologies, is intended to be used as a tool to provide physicians with more information to help in the decision-making process for people with indeterminate lung nodules that may be lung cancer following a CT scan.
The Directors and Proposed Directors believe that the LungLB® test will provide ‘significant benefit’ when added to the clinical care pathway by reducing the number of unnecessary invasive procedures and reducing delays in treatment that may otherwise afford cure.
Immediately following its admission to London’s AIM market, shares in LungLife AI were trading 5.00% higher at 210p during morning trading, up from its issue price of 176p.
The Group said advancing a validation study and a utility study, respectively, for the LungLB® test is needed in order to seek US FDA authorisation and gather support for reimbursement.
Currently, there are estimated to be over 1.5 million individuals with indeterminate lung nodules diagnosed each year in the US which is in part, due to the lack of effective early detection solutions and the fact that lung cancer largely develops asymptomatically.
The early detection of lung cancer is therefore a significantly unmet medical need. According to the World Health Organisation, over 2.2 million new cases of lung cancer were diagnosed in 2020 and around 1.8 million deaths from lung cancer were recorded in 2020 globally.
To date, LungLife has completed a 149 subject pilot study to evaluate the LungLB® test, which showed a well-balanced performance and a Positive Predictive Value of 89%. Going forward, the Company said it is now ‘gearing up’ to proceed to a larger, multi-centre validation study to garner regulatory and reimbursement support and facilitate commercialisation.
"Lung cancer accounts for nearly a quarter of all cancer-related deaths in the US because in many cases it's diagnosed too late. Early detection is key and we believe our simple blood test enhanced by artificial intelligence will give physicians the additional information needed to identify this disease earlier and reduce its impact,’ Pagano highlighted to investors.
While the price has not yet been determined for the Company’s LungLB® test, the Directors said they believe that it will be less than one tenth of the cost of a lung biopsy of which the average cost is $14,587. This is the figure before taking into account the additional cost of care of dealing with any adverse event from a biopsy (the average cost of which is $37,745).
To support its efforts here, LungLife AI has entered into various agreements with the Icahn School of Medicine at Mount Sinai ("Mount Sinai"), which is an international leader in medical and scientific training and biomedical research and is part of the Mount Sinai Health System. Today’s proceeds will enable the Group to fund cash payments due under this agreement.
In addition, today’s proceeds will also enable the Company to further develop its AI algorithms and to cover general corporate overheads, including marketing and business development, as well as other planned capital expenditure and for general working capital purposes.
Addressing shareholders, Pagano said: "Our focus now is to proceed to a larger multi-centre pivotal validation study and secure regulatory authorisation and reimbursement support.”
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