Dimerix's (ASX:DXB) AU$10 million financing package represents a "major milestone" as the company is now fully funded through the completion of its phase 3 focal segmental glomerulosclerosis study for the first time, Euroz Hartleys said in a Friday note.
"While not without cost, we view borrowing against the up to AU$1.9 billion in potential milestones and royalties secured across five licensing deals as substantially cheaper than diluting at the current share price," the investment firm said.
Dimerix is also in late-stage discussions for an additional AU$40 million in financing on similar terms to fund a newly acquired second asset. Securing the additional amount would take the company's pro-forma cash to around AU$83.6 million, Euroz Hartleys said.
Meanwhile, the company's acquisition of the DMX-652 therapeutic asset from UK-based Mission Therapeutics provides a consistent stream of catalysts over the next two years and transitions Dimerix from a single-asset play into a diversified biotech company, the equity research firm said.
"We view DMX-652 as a low-cost strategic option that provides a clear pathway into a complementary kidney indication," Euroz Hartleys said, adding that the deal's $5 million upfront consideration "is modest for a phase 2-ready asset targeting a multi-billion-dollar end market."
The investment firm maintained a speculative buy recommendation on Dimerix with an under-review price target of AU$2.05.
Dimerix shares gained 2% in recent Friday trade.
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