Fundraising looks well supported

RUA have announced, subject to shareholder approval at a General Meeting, the intention to raise equity via the combination of an institutional placing of shares, a subscription by certain directors and a retail offer. While the minimum gross proceeds are expected to be at least £4.1m, the full amount raised will be fluid until after the retail offer and shareholder approval. The final proceeds raised should be known after the outcome of the Retail Offer is announced on 8 December, and shareholder vote then comes at the General Meeting on 18 December when we will update our financials and model.

As well as having revenue-generating divisions, RUA’s Structural Heart and Vascular divisions have products in late-stage development and its recent strategy update noted that these will be developed with partners. While partnering greatly reduces RUA’s cash burn in FY 2024 and beyond, the fundraising also eliminates a potential weakness in the size of the upfront payments, royalties and milestones for those deals. This is because before a successful fundraising, potential partners could attempt to offer less, and defer more. After a successful fundraising, RUA should be able to demand better terms from its potential partners.

For now, our valuation is unchanged at £120.3m or 542p per share, but we will update our financials and valuation after the completion of the fundraising and RUA’s interim results on the same day.