Botanix Pharmaceuticals (ASX: BOT) has secured commitments for a capital raise of approximately A$45 million.
This funding initiative comprises a two-tranche placement to sophisticated and institutional investors, aiming to raise roughly A$40 million, alongside an underwritten security purchase plan (SPP) targeting approximately A$5 million.
New shares under the offer are priced at A$0.06 each, representing a 45.5% discount to the last traded price before the company entered a trading halt on 13 February 2026.
Notably, Directors and the CEO of Botanix are participating in the capital raise, committing an aggregate of approximately A$500,000.
Funding API Purchases and Supply
The substantial funds raised are earmarked for several strategic initiatives crucial to Botanix's operations.
A primary use of proceeds is for the purchase of Active Pharmaceutical Ingredients (API), which are essential for its products.
The company also plans to invest in setting up an alternate API supplier.
This move aims to diversify its supply chain and derisk potential disruptions, with onboarding of the new supplier targeted for completion by 2028.
Botanix anticipates this diversification could lead to a significant reduction in its cost of goods sold (COGS), with a potential saving of 25–40%.
Accelerating Sofdra Growth
A portion of the capital raise will be directed towards accelerating the growth of Sofdra, Botanix's lead product.
This includes expanding the product Fulfilment platform, which supports the commercialisation of Sofdra.
Sofdra's commercialisation commenced in early 2025, and it has shown positive momentum. In Q2 FY26, the product generated an unaudited net revenue of A$9.1 million, with total prescriptions increasing by 24% quarter-on-quarter to 25,351.
Market research further indicates strong future intent, with 90% of healthcare professionals expecting to increase their Sofdra prescribing over the next six months.
Shareholder Approvals and Dilution
While commitments for the raise have been secured, certain aspects remain subject to shareholder approval.
The second tranche of the placement and the entire security purchase plan (SPP) will require approval at an upcoming Extraordinary General Meeting (EGM), expected in late March or early April 2026.
Participants in both the placement and the SPP will also be offered new options on a 1:1 basis.
These options will have an exercise price of A$0.06 and an expiry date of 31 January 2027, also subject to shareholder approvals.
The issuance of new shares will result in dilution for existing shareholders, as is common with equity capital raises.
