REG - Allergy Therapeutics - Update on funding

Allergy TherapeuticsAnnouncement

16/10/2024 07:00

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RNS Number : 3146I  Allergy Therapeutics PLC  16 October 2024

 

Allergy Therapeutics plc

("Allergy Therapeutics", the "Group" or "Company")

 

 

Update on funding

 

16 October 2024 Allergy Therapeutics plc (AIM: AGY), the integrated commercial
biotechnology company specialising in allergy vaccines, today provides an
update on the Group's funding and working capital position.

 

The Company is pleased to announce that it has entered into a £40m secured
senior loan facility (the "Hayfin Facility") with Hayfin Healthcare
Opportunities LuxCo S.a.r.l., a fund advised by Hayfin Capital Management LLP
("Hayfin"), a leading alternative asset management firm.

 

The Hayfin Facility consists of a committed £20m five year term loan and an
additional uncommitted £20m incremental facility. As part of these financing
arrangements, the Company has also issued to Hayfin 131,603,616 warrants to
subscribe for new ordinary shares, representing approximately 2.7% of the
issued share capital of the Company, with a nominal exercise price of 0.1
pence per warrant and exercisable for a period of ten years from the date of
issue. The Hayfin £20m loan is subject to an upfront arrangement fee and has
a variable interest rate based on SONIA plus 9.5% per annum with interest
payable based on Company selected interest periods.

 

Furthermore, following discussions with major shareholders, SkyGem Acquisition
Limited (an affiliate of ZQ Capital Management Limited) and Southern Fox
Investments Limited (together the "Shareholder Lenders"), the existing loan
facility of £40m (the "Shareholder Facility"), details of which were
announced on 27 December 2023 (the "Shareholder Financing Announcement"), has
been increased to £50m and its term extended to October 2030. To date,
£27.5m has been drawn and is outstanding under the Shareholder Facility,
leaving an undrawn but uncommitted balance of £22.5m. The Shareholder
Facility has been amended ("the Amended Shareholder Facility") to be unsecured
and rank behind the Hayfin Facility. In addition, interest under the
Shareholder Facility will no longer be paid and instead interest will be
rolled up into capital.

 

The Company also confirms that it will be issuing 687,500,000 warrants to the
Shareholder Lenders following announcement of the Company's preliminary
results later this month in accordance with the terms of the Shareholder
Facility and as set out in the Shareholder Financing Announcement. These
warrants entitle the holders to subscribe for new ordinary shares at a price
of 4 pence per share and are exercisable in whole or in part from 1 July 2024
until October 2030.

 

With the £20m committed Hayfin funding and £42.5m of uncommitted facilities,
from both Hayfin and the Shareholder Lenders, the Group has access to
substantial capital to continue to drive the business forward.

 

The Group continues to deliver against its plan of improvements to its
operational and quality systems, this has paved the way for increased
manufacturing capacity and a return to sales growth which will be further
detailed in the preliminary results.

 

Manuel Llobet, Chief Executive Officer of Allergy Therapeutics, commented:
"This long-term funding transaction, together with the continued progress of
our key R&D programmes and an enhanced supply chain to enable top line
growth, has largely removed our funding overhang and puts Allergy Therapeutics
in the best strategic position for the future."

 

Howard Rowe, Head of Healthcare at Hayfin, commented: "Allergy Therapeutics
represents the best of British pharmaceutical enterprise within the field of
allergy treatments and we are delighted to support its R&D growth and
continued commercial drive. The company aligns perfectly with Hayfin's ethos
of supporting cutting-edge businesses in the healthcare sector looking for
investment capital to deliver untapped potential."

 

Related Party Transaction

The Amended Shareholder Facility including the increase to £50m is deemed to
be a related party transaction pursuant to Rule 13 of the AIM Rules for
Companies by virtue of ZQ Capital (together with its affiliates, SkyGem, ZQ
Capital and Zheqing (Simon) Shen) and Southern Fox being substantial
shareholders of the Company (within the meaning of the AIM Rules for
Companies).

 

The Directors of the Company who are independent of the Amended Shareholder
Facility, being all of the Directors save for Zheqing (Simon) Shen and Anthony
Parker consider, having consulted with its nominated adviser, Cavendish
Capital Markets Limited, that the terms of the Amended Shareholder Facility
including the increase to £50m are fair and reasonable insofar as the
Company's shareholders are concerned.

 

This announcement contains inside information for the purposes of the UK
Market Abuse Regulations.

 

 

 

Allergy Therapeutics

Manuel Llobet, Chief Executive Officer

Shaun Furlong, Chief Financial Officer

+44 (0)1903 845 820

 

Cavendish Capital Markets Limited (Nominated Adviser and Broker)

Geoff Nash / Seamus Fricker / Rory Sale

Nigel Birks- Life Science Specialist Sales

Tamar Cranford Smith - Sales

+44 (0)20 7220 0500

 

ICR Consilium

Mary-Jane Elliott / David Daley / Davide Salvi

+44 (0)20 3709 5700

allergytherapeutics@consilium-comms.com
(mailto:allergytherapeutics@consilium-comms.com)

 

 

About Allergy Therapeutics

Allergy Therapeutics is an international commercial biotechnology company,
headquartered in the UK, focussed on the treatment and diagnosis of allergic
disorders, including aluminium free immunotherapy vaccines that have the
potential to cure disease. The Group sells proprietary and third-party
products from its subsidiaries in nine major European countries and via
distribution agreements in an additional ten countries. Its broad pipeline of
products in clinical development includes vaccines for grass, tree, house dust
mite and peanut. For more information, please see www.allergytherapeutics.com
(http://www.allergytherapeutics.com) .

 

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