• A ginger group of Mayne Health shareholders argues Cosette’s $600 million offer isn’t the right prescription
• Artrya gets to the heart of the matter after FDA approval
• Zelira Therapeutics goes to the ATM for $1 million

US healthcare group Cosette’s $600 million takeover offer for Mayne Pharma (ASX:MYX) might have won the quick endorsement of its two biggest holders, but not all investors are enthused.

A posse of small shareholders has formed Mayne Defenders, which argues the $7.40 a share cash offer does not reflect Mayne’s unfolding turn around.

Co-convenor Peter Cooper says while the offer was struck at a 37% premium, it leaves too much upside for the private equity backed Cosette.

Mayne’s reported a 13% uptick in half year revenue uptick to $213 million.

While the net loss came in at $20 million compared with $70 million previously, underlying earnings soared 288% to $31 million.

“The company is starting to turn around,” Cooper says.

Cooper notes Mayne’s $125 million of cash and the value of the company’s 12-hectare  manufacturing site at Salisbury in Adelaide (in the books at a conservative $18 million).

Cooper says that as a supplier of dermatology products to Mayne, Cosette would be especially interested in how Mayne has adopted a direct-to-customer model, “bypassing the pharmaceutical benefit managers who hold sway on pricing in the US.”

Cooper gives full credit to management for that one.

He reckons Mayne Defenders account for around two million shares – about 2.5% of the register.

The takeover is by way of a scheme of arrangement, which requires 75% approval from voting holders.

The group is pinning its hopes on the additional requirement of the consent of at least 50% of voting investors by number.

Ahead of the takeover announcement, the board secured the support of Viburnum Funds and pokies king Bruce Mathieson, who account for 14% of the register.

Several other instos have declared they are no longer substantial holders, which means they have slipped below the 5% threshold or bailed altogether.

The company says Cosette’s offer is “in line with the board’s priority to deliver value to our shareholders and also provides significant benefits to our broader stakeholders”.

Due out any day, the scheme document – including an independent expert report – should cast further light on the metrics.

Second time lucky for Artrya at the FDA

Artrya (ASX:AYA) says it will move quickly to US commercialisation of its coronary plaque identification tool Salix Coronary Anatomy (SCA), having last week won Food & Drug Administration (FDA) marketing approval.

The assent is a case of second time lucky for Artrya, given the agency rejected SCA a couple of years back.

“There was a fair bit of credibility to rebuild with the FDA,” CEO Matthew Regan says. “It [approval] sets the foundation for everything we want to do”.

The company is starting with 15 hospitals and clinical centres in the southeast US, via agreements inked last year with Northeast Georgia Health Ventures,  Healthliant Ventures and Cone Health.

These healing establishments account for about 15,000 scans per annum.

“We are able to be a little bit choosy early on,” Regan says.

“We want to make sure every  system works and works well.”

Further commercial agreements to be inked this calendar year.

The AI-based SCA gives a point-of-care assessment within ten minutes of a coronary computed tomography angiogram (CCTA) scan being undertaken.

An  estimated 4.4 million CCTA scans are performed annually in the US, growing at around 6% per annum.

SCA is only the start, with the company panning to lodge approval applications for Salix Coronary Plaque (SCP), which quantifies problems in a more granular way and automates the process.

The company plans a further application for Salix Coronary Flow (non-invasive heart blood flow analysis).

“The real revenue will kick off when SCA gets approved, and  we are targeting the end of July,” Regan says.

The company expects SCA to fit an existing reimbursement code of US$357 per scan. For SCP, the payment is US$750, rising to US$1017 for the blood-flow tool.

SCP already is approved in the UK, Europe, New Zealand and here, but Artrya is focused on the capacious US market.

Locally, the company has signed up Sonic Health Australia on a three-year, subscription deal.

“Australia will never shoot the lights out, but it gives us credibility in a health system that’s consistent with the US,” Regan says.

Salix is in the throes of a two-tranche placement to raise $15 million at 73 cents a share.

At the time the offer was at a 15% discount, but the shares spiked to 87 cents after Friday’s news.

Echo IQ seals US heart-imaging deals

Still on matters of the heart, Echo IQ (ASX:EIQ) has struck an agreement with 36 US cardiology networks to expand usage of its recently approved AI-based tool to detect aortic stenosis (narrowing of the arteries).

The deal involves the clients, Scimage and Medaxiom, fully integrating Echosolv AS into their medical workflow platforms.

With more than 1200 users, Scimage specialises in collating medical images and enabling access to real-time patient information for its client base.

Medaxiom is the cardiovascular community’s “premier source for organisational performance solutions.”

Echosolv AS initially will be used across deployed 36 Medaxiom/Scimage-affiliated hospitals and cardiology practices.

The FDA approved Echosolv AS in October last year.

Echo IQ expects assent for a heart failure variant this calendar year.

Zelira avails of ‘at the market’ fundraising facility

Pot stock Zelira Therapeutics (ASX:ZLD) has entered an ‘at the market’ (ATM) arrangement to secure $1 million of equity capital, availing of a funding mechanism that’s common in the US.

An ATM enables a company to issue the shares at a time of its choosing. This avoids the need for a larger, dilutionary raising at an inopportune time that could be highly dilutive.

As the name implies, an ATM is done at the prevailing market price and not a discount.

ATMs also obviates the need for a placement if an investor such as a family office wants a small investment. They also enable companies to capitalise quickly on share-moving good news, such as positive trial results.

They are intended as an ancillary ‘top up’ measure, rather than a primary source of funding.

Initially Zelira is issuing 550,000 shares – 4.85% of its issued capital to raise approximately $260,000.

The mechanism has been used in the US since the 1990s, including by Citigroup, Bank of America, American Airlines and Elon Musk’s Tesla (which raised $US10 billion via ATMs in late 2020.

ASX biotechs to go to the ATM – but not necessarily draw down equity – include the stricken Opthea (ASX:OPT) (for up to US$75 million), Recce Pharmaceuticals (ASX:) ($20m) and the now US-listed Kazia Therapeutics (US$35 million).

Of course, nothing in life is free and ATMs entail a fee, typically up to 3% of the size of the facility.

At Stockhead, we tell it as it is. While Recce is a Stockhead advertiser, the company did not sponsor this article.