REG - Cizzle Biotechnology - Royalty Acquisition Agreement

Cizzle Biotechnology HoldingsAnnouncement

14/02/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220214:nRSN5069Ba&default-theme=true

RNS Number : 5069B  Cizzle Biotechnology Holdings PLC  14 February 2022

This announcement contains inside information for the purposes of article 7 of
EU Regulation 596/2014 which forms part of domestic UK law pursuant to the
European Union (Withdrawal) Act 2018 ("UK MAR").  Upon the publication of
this announcement this inside information is now considered to be within the
public domain.

 

14 February 2022

 

Cizzle Biotechnology Holdings Plc

 

("Cizzle Biotechnology", "Cizzle" or the "Company")

 

Acquisition of Royalty Deal in Inflammatory Pulmonary and Cardiovascular
Diseases

 

Cizzle Biotechnology, the UK based diagnostics developer, is pleased to
announce that it has entered into a definitive agreement (the "Agreement")
with Conduit Pharmaceuticals Limited ("Conduit") and St George Street Capital
Limited ("SGSC") to acquire a 5% economic interest in the commercialisation of
the AZD 1656 asset or other such assets being developed by Conduit or SGSC to
treat inflammatory pulmonary and cardiovascular disease (the "Economic
Interest").

 

Highlights

 

·    Agreement with Conduit and SGSC to acquire a 5% economic interest for
a total consideration of £1.88 million, to be settled in new Cizzle ordinary
shares at a price of 4.0p per share, a 56.9% premium to the closing mid-market
price on 11 February 2022

 

·    The Agreement is in addition to the Company's existing interest in
AZD 1656 as announced on 20 September 2021

 

·    SGSC recently reported the successful completion of the AZD 1656
ARCADIA clinical trial in Covid-19 and SGSC and Conduit are in discussions
with multiple pharmaceutical companies about licensing opportunities for AZD
1656 for Covid-19 and potentially for further indications

 

·    The Agreement supports the Company's ambitions to expand its target
customer base into the pharmaceutical industry and is in line with its
strategy of building a portfolio of early cancer detection tests, companion
diagnostics and royalty bearing stakes in significant drug assets

 

Allan Syms, Executive Chairman of Cizzle Biotechnology, said

 

"The agreement announced today represents an important extension to our close
relationship with SGSC and Conduit. On 20 September 2021 we announced we had
acquired a stake in SGSC's AZD 1656 asset, providing the opportunity for the
Company to receive royalty payments of up to £5 million and shortly after
SGSC contracted the Company to develop an associated companion diagnostic test
for which we will receive fees of up to £1 million.

 

"We are now pleased to have the opportunity to increase our stake by an
additional 5% in AZD 1656, but significantly the Economic Interest will be
uncapped.  This new Agreement supports the Company's ambitions to expand its
target customer base in the pharmaceutical industry and through a strategy of
building a portfolio of early cancer detection tests, companion diagnostics
and royalty bearing stakes in significant drug assets significantly increase
shareholder value."

 

Background

 

SGSC is a UK-based medical-charity led by a group of highly decorated
academics and ex-pharma executives formed to deliver much needed treatments to
patients. SGSC's strategy is to take clinical-ready assets from pharmaceutical
companies and to progress them through Phase II medical trials, before
licensing them on for Phase III trials and commercialisation in order to
create a return for investors and the charity alike. SGSC recently reported
the successful completion of the AZD 1656 ARCADIA clinical trial in Covid-19
and SGSC and Conduit are in discussion with multiple pharmaceutical companies
about licensing opportunities for AZD 1656 in both Covid-19 and potentially in
further indications. Conduit is the exclusive funding partner to the Charity.

 

The ARCADIA trial data, that treated inflammatory pulmonary and cardiovascular
disease caused by Covid-19, showed a strong trend towards reduced mortality in
patients receiving AZD 1656. The strong trend to improved mortality for
patients on AZD 1656 was observed on top of patients receiving other
medication as part of standard of care. AZD 1656 was also shown to be
well-tolerated in this patient population with no serious adverse reactions
(SARs) occurring. Overall, no safety concerns were identified regarding the
use of AZD 1656 in this patient population.

 

Furthermore, SGSC has shown there was a significant increase in the migration
of the Regulatory T Cells ("Tregs") from the patients who had taken the drug
compared to the Tregs from the patients who had not. Tregs are a specialised
subpopulation of T cells that act to suppress immune response and combat
damaging cells, potentially reducing serious cardiovascular and lung diseases
which are causative in the development of lung cancer, which Cizzle is
developing its diagnostic test to identify.

 

Under the Agreement Cizzle Biotechnology will receive 5% of all such sums
received by SGS pursuant to any AstraZeneca ("AZ") commercialisation or
sub-license commercialisation of the AZ asset in inflammatory pulmonary and
cardiovascular diseases, after the deduction of certain sums.

 

Consideration for the Agreement

 

Under the terms of the Agreement, Cizzle will pay consideration of £1.88
million to SGS for the Economic Interest. Of the consideration payable, £1.0
million (the "Initial Consideration") will be satisfied by the issue of
25,000,000 new ordinary shares in the Company (the "Consideration Shares"), at
a price of 4.0 pence per Consideration Share, being a premium of 56.9 per
cent. to the Company's closing mid-market price of 2.55 pence on 11 February
2022. The remaining consideration of £880,000 will be payable in new ordinary
shares in the Company issued at 4.0 pence per share, on the sooner of
receiving shareholder approval to issue the shares or the first anniversary of
completion.

 

Total Voting Rights

 

On completion of payment of the Initial Consideration, Conduit will hold
25,000,000 ordinary shares in Cizzle representing 8.98 per cent. of the issued
share capital of the Company, as enlarged by the issue of the Consideration
Shares.

 

The Company has applied for admission of the 25,000,000 Initial Consideration
new Ordinary Shares to trading on the Standard Segment of the Official List
and the Main Market of the London Stock Exchange ("Admission").  It is
expected that Admission will become effective on or around 17 February 2022.

 

The Company's issued ordinary share capital on Admission will consist of
278,447,788 ordinary shares of 0.1 pence each, all with voting rights. The
Company holds no ordinary shares in Treasury. This figure may be used by
shareholders as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a change to
their interest in, the Company under the FCA's Disclosure Guidance and
Transparency Rules.

 

Enquiries:

 

 Cizzle Biotechnology Holdings plc  Via IFC Advisory
 Allan Syms (Executive Chairman)

 

 Allenby Capital Limited  +44(0) 20 33285656
 John Depasquale
 Alex Brearley

 

 Novum Securities Limited  +44(0) 20 7399 9400
 Colin Rowbury

 Jon Bellis

 

 IFC Advisory Limited  +44(0) 20 3934 6630
 Tim Metcalfe          cizzle@investor-focus.co.uk
 Florence Chandler

 

Notes to Editors:

About Cizzle Biotechnology

Cizzle Biotechnology is developing a blood test for the early detection of
lung cancer.  Cizzle Biotechnology is a spin- out from the University of
York, founded in 2006 around the work of Professor Coverley and colleagues.
Its proof-of-concept prototype test is based on the ability to detect a stable
plasma biomarker, a variant of CIZ1 known as CIZ1B.  CIZ1 is a naturally
occurring cell nuclear protein involved in DNA replication, and the targeted
CIZ1B variant is highly correlated with early-stage lung cancer.

For more information, please see https://cizzlebiotechnology.com
(https://cizzlebiotechnology.com)

You can also follow the Company through its twitter account @CizzlePlc and on
LinkedIn.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  AGREALADFAFAEFA