Paradigm Biopharmaceuticals (ASX:PAR) received firm commitments to raise AU$16 million via the placement of 40 million shares at AU$0.40 apiece, according to a Monday filing with the Australian bourse.

The company also plans to issue one listed option for every four shares held under its loyalty option incentive program, exercisable at AU$0.65 and with a 12-month expiry, the filing said.

Proceeds will be used to fund a third phase clinical trial for osteoarthritis treatment using pentosan polysulfate sodium injections, starting in Australia in the first quarter of 2025 and expanding to US sites in the second quarter, according to the filing.

Shares fell 6% in afternoon trade Monday.

Price (AUD): $0.55, Change: $-0.04, Percent Change: -6.03%