REG - Ashington Innovation - Heads of Terms Signed for the Acquisition of Calon

Ashington InnovationAnnouncement

24/08/2023 07:00

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RNS Number : 2693K  Ashington Innovation PLC  24 August 2023

This announcement contains inside information as stipulated under the UK
version of the Market Abuse Regulation No 596/2014 which is part of English
Law by virtue of the European (Withdrawal) Act 2018, as amended. On
publication of this announcement via a Regulatory Information Service, this
information is considered to be in the public domain.

 

Press Release

 

24 August 2023

 

Ashington Innovation plc

 

("Ashington" or "the Company")

 

Heads of Terms Signed for the Acquisition of Calon Cardio-Technology Limited,
subject to the

Completion of the Reverse Takeover of Cell Therapy Limited

 

Ashington Innovation plc (LSE: ASHI; FSE: 6FW), a special purpose acquisition
company, is pleased to announce it has entered into a non-binding heads of
terms agreement with Calon Cardio-Technology Limited ("Calon"), to acquire
100% of the outstanding shares in Calon in an all-share transaction. The
acquisition is subject to the completion of the proposed reverse takeover of
Cell Therapy Limited ("CTL") announced on 19th August 2023 as well as
customary legal, financial, and other due diligence for a transaction of this
type and entry into a legally binding sale and purchase agreement (the
"Proposed Acquisition"). As no binding agreement has yet been reached, the
Company cannot guarantee that the Proposed Acquisition will complete.

 

About Calon

Calon is a UK medical device company developing a Left Ventricular Assist
Device (LVAD), an implantable heart pump for patients with severe heart
failure. Calon's proprietary LVAD is registered under the trademark
Mini-VAD™.

 

The Mini-VAD™ has demonstrated during in vitro studies a significant
reduction in blood damage compared to current LVADs. Calon manufactures its
Mini-VAD™ at its state-of-the-art R&D and manufacturing facility in
Wales and its technology is protected by a suite of patents and patent
applications. Calon has been awarded multiple awards and non-dilutive funding
grants, including being selected for the UK Government's Global Incubator
Programme. Over its lifetime it has raised over £20m in equity and grant
funding.

 

Background to the Proposed Acquisition

Ashington was formed as a special purpose acquisition company with the
intention of acquiring businesses operating in the technology sector as
outlined in its prospectus published on 2 June 2023 (the "Prospectus"), which
can be found on the Company's website:

 

https://www.ashingtoninnovationplc.com/wp-content/uploads/2023/06/Ashington-Innovation-PLC-final-prospectus26.pdf
(https://www.ashingtoninnovationplc.com/wp-content/uploads/2023/06/Ashington-Innovation-PLC-final-prospectus26.pdf)
.

 

On 17 August 2023, Ashington announced it had signed a non-binding heads of
terms agreement to acquire Cell Therapy Limited, trading as Celixir, via
reverse takeover, which led to the suspension of its shares pending completion
of the transaction. The addition of Calon dovetails with the proposed Cell
Therapy acquisition and demonstrates the Company's broader strategy to form a
material regenerative medicine company in the UK that addresses the sizeable
heart failure market.

 

Calon's LVAD technology is highly complementary with the cell therapies
developed by 2007 Nobel prize winner and CTL co-founder Professor Sir Martin
Evans, which target heart failure. CTL's development expertise in completing
pre-clinical studies, securing FDA IND and clinical trial approvals in the UK
and Europe, GMP manufacturing approvals and executing clinical trials will be
leveraged across the group including development of a new therapy that
combines its lead cell therapy, HeartCel™ with Mini-VAD™ implantation.

 

The enlarged group will be led by Executive Chairman, Dr Darrin M Disley OBE,
an experienced private/public company CEO and Director and a successful and
highly regarded biotech entrepreneur. Prof. Sir Martin Evans will serve as the
Group's Chief Scientist and eminent heart surgeon and founder of Calon, Prof.
Steve Westaby, will serve as Chief Medical Officer.

 

The Proposed Acquisition

Following recent discussions, on 23 August 2023 Ashington entered a
non-binding heads of terms agreement with Calon for the acquisition of 100% of
the issued share capital of Calon for a purchase price of £39 million, to be
satisfied by the allotment and issue of new ordinary shares in Ashington
Innovation PLC to the shareholders of Calon.

 

On completion of the Proposed Acquisition, it is Ashington's intention to seek
admission of its enlarged ordinary share capital and related financing, to the
Standard Segment of the Official List of the Financial Conduct Authority
("FCA") and to trading on the Main Market of the London Stock Exchange
(together, "Admission").

 

The Proposed Acquisition is subject, inter alia, to:

 ·         the completion of due diligence;
 ·         the completion of the reverse-takeover of CTL;
 ·         definitive sale and purchase documentation;
 ·         obtaining the necessary regulatory approvals from the FCA;
 ·         the raising of an appropriate amount of new equity funds by the Company;
 ·         the Takeover Panel waiving any obligation the Calon shareholders (and any
           persons acting in concert with them) might otherwise incur under Rule 9 of the
           City Code by virtue the issue to them of consideration shares (the "Rule 9
           Waiver"); and
 ·         the passing of necessary resolutions to approve the Proposed Acquisition
           (including the Rule 9 Waiver) by the shareholders of the Company at a duly
           convened general meeting (the "General Meeting").

 

To effect Admission, obtain the Rule 9 Waiver and to convene the General
Meeting, the Company is required to publish a prospectus, to be approved by
the FCA, which will include relevant details relating to the Company, CTL,
Calon and the Proposed Acquisition, amongst other things.

 

Jason Smart, Founder of Ashington Innovation, commented: "We are delighted to
be able to announce our broader strategy namely, to create a material
regenerative medicine group by combining some of the most innovative British
companies. The biotech and MedTech sectors present compelling opportunities to
create value for shareholders and the Proposed Acquisition of CTL and Calon
represent high-quality targets with experienced and expert leadership teams.

 

"CTL aligns with Ashington's stated IPO objective to acquire a firm with a
technology nexus, global intellectual property protection and a business plan
built on delivering defined clinical development milestones that represent
meaningful value inflections to shareholders.

 

"The addition of Calon adds significant synergy in developing next generation
therapies that address unmet needs in highly attractive cardiac healthcare
market and augments the position of the enlarged company for sustainable value
accretion. We look forward to supporting CTL and Calon with their mission to
develop high innovative first-in-class therapies."

 

Dr Darrin Disley, Chairman of Celixir Limited, commented: "We are delighted to
partner with Ashington to form a material clinical stage regenerative medicine
company. In 2020, we made the strategic decision to streamline the business to
focus all of our resources on developing our pre-clinical and clinical
pipeline of cell therapies that address heart failure. This was implemented
quietly without any public announcements while keeping our shareholders
informed with a confidential quarterly update. During this stealth period, key
pre-clinical and clinical development milestones were met as well as patents
granted for our lead cell therapy in the US, EU, and Asia and the entering of
a £100M PIPE funding agreement that can be accessed on the listing of our
shares. The company has created significant momentum for the business going
into the Proposed Transaction with Ashington including in 2022 the dosing of
the first cohort of patients in our randomised Heart failure clinical trial
and completing pre-clinical development of two follow-on cardiac cell
therapies, generating in vivo efficacy and safety data both in-house and with
our Big Pharma partner.

 

"The addition of Calon is highly compatible with our mission to develop
first-in-class regenerative cell therapies in areas of high unmet medical need
like heart failure and we look forward to working with the Calon team to
accelerate the cell + pump combination therapy.

 

"It is now the correct time to access the public markets building on the
results that have already been achieved by CTL and Calon and the tremendous
potential of our portfolio of regenerative medicines, Mini-VAD™ and the
combination therapy moving forward. We look forward to providing more details
on the Company's strategy and market potential in due course."

 

Professor Steve Westaby, Founder and Director of Calon, commented: "Over 60
million patients suffer from heart failure. Heart transplantation is not a
reliable and resilient treatment plan in the long-term; the availability of
donor hearts is insufficient, coupled with anti-rejection complications
including cancer. The Calon design has resulted in a smaller and lighter LVAD
with blood damage performance a factor of 2.2X better than competitors in in
vitro studies and the systems enhanced performance has been confirmed in
validated in vivo models of heart failure.

 

"The development of LVADs, cell therapies and combination therapy have
enormous potential to improve the lives of the many millions of patients with
cardiomyopathy and so, we are delighted to joining Ashington and CTL into
accelerating the development of these lifesaving treatments for patients in
heart failure"

 

For further information please contact:

 

 Ashington Innovation plc
 David Orchard                       via Tancredi +44 207 887 7633

 General Counsel
 Tancredi Intelligent Communication

 Media Relations
 Helen Humphrey                      +44 7449 226 720

 Charlie Hobbs                       +44 7897 557 112

 Jasmine Gadhavi                     +44 7931 435 236

 ashington@tancredigroup.com

 

About Ashington Innovation plc

Ashington Innovation PLC is a special purpose acquisition company (SPAC),
formed with the intention of acquiring businesses operating in the technology
sector.

The Company believes that in the increasingly fast-changing global environment
there will be an abundance of opportunities to acquire existing businesses in
the technology sector, and in particular businesses that possess and utilise
proprietary technologies and own applicable intellectual property.

The Company is not limited to any specific geographic region in identifying
its target companies.

www.ashingtoninnovationplc.com (http://www.ashingtoninnovationplc.com)

 

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