Aslan proves what goes up must come down with rights issue

Aslan Pharmaceuticals really needed a win following two major clinical trial blow-ups this year, but the roller coaster ride continues. Strong early efficacy for its IL-13 atopic dermatitis treatment, ASLAN004, caused the Singapore-based company's stock to jump more than 30% yesterday. Caution over such a small data set crept in today, though a hastily announced rights would have been mostly responsible for the 46% plunge in early trading. The group desperately needs the money to take forward new projects - it was forced to halve its cost base in January following the failure of its lead project, the pan-Her inhibitor varlitinib, in gastric cancer. Varlitinib subsequently also failed in biliary cancer, dashing hopes of regulatory submissions. So it is not surprising that the company has used the good news from ASLAN004 to raise as much cash as it can. While it has proved unpopular with shareholders, Aslan’s $12.8m rights issue should be enough for it to not only start the second stage of its phase I trial, but bargain with any future partners from a better position of strength.

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