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Investors have reacted positively to healthcare group Ark Therapeutics' proposed £35.4 million fundraising at 105p through a placing and open offer to existing shareholders.

Ark, which is developing gene-based treatments for vascular diseases and cancers, says the funds raised will be used to take one product, nervous tumour treatment Cerepro, to market.

The company also plans to devote some of the proceeds to taking two other products, cancer-related weight loss and atrophy treatment Vitor and gene blood dialysis medicine Trinam (already with recognition-accelerating US 'orphan drug' status), into the final stages of development. Piper Jaffray and Credit Suisse have underwritten the offer, which is open to shareholders on the basis of three new shares for every four already held, and Ark says the placing has been oversubscribed, with 'strong support' from investing institutions.

The funds will help hasten the day when Ark, which lost £19 million in 2006 and £11.3 million in the first half of this year, can hope to make money out of its developments in gene medicine. In addition, chief executive Dr. Nigel Parker claims 'the support shown for this fundraising enables us to bring new second-generation gene medicines into the clinic and strengthen our leadership position'.

At 111p, up 3p today but below this year's 152p high, the shares, though not risk-free, could still repay a punt if the products make it successfully to market.

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Ark Therapeutics	LSE	£73.86m	36.00p	-1.25p
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