REG - Destiny Pharma PLC - Issue of Equity
24/02/2023 13:45
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RNS Number : 0315R Destiny Pharma PLC 24 February 2023
THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) (THIS "ANNOUNCEMENT") AND THE
INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION
OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM
THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR
ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION
WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS
ANNOUNCEMENT.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
24 February 2023
Destiny Pharma plc
Fundraising to raise up to £8 million
Destiny Pharma plc (AIM: DEST) (the "Company" or "Destiny Pharma"), a clinical
stage innovative biotechnology company focused on the development of novel
medicines that can prevent life-threatening infections, today announces a
conditional fundraising of up to approximately £8 million (before expenses)
comprising a Placing, Subscription and an Open Offer (each as defined below).
The net proceeds of the Fundraising will allow the Company to complete final
Phase 3 clinical trial preparation for NTCD-M3, including clinical trial
material manufacturing; progress XF-73 Nasal CMC manufacturing and Phase 3
preparation; to further progress its preclinical projects; and to provide
general working capital to strengthen the balance sheet, which is a condition
of the Collaboration and Co-development agreement with Sebela Pharmaceuticals
as announced earlier today.
Certain defined terms used in this Announcement are set out in Appendix III to
this Announcement.
The Company has placed new ordinary shares of one pence each ("Ordinary
Shares") in the capital of the Company (the "Placing Shares") at a price of 35
pence per Placing Share (the "Issue Price") to raise approximately £7 million
(before expenses), (the "Placing"). Of the Placing Shares, 14,285,714 new
ordinary shares are being allotted out of existing share authorities and will
be admitted on 1 March 2023 the remaining 5,714,286 new ordinary shares will
be subject to approval by Shareholders of the requisite authorities at the
General Meeting on 16 March 2023.
The Company also announces a conditional subscription by certain directors of
the Company (the "Directors" or the "Board") of an aggregate 71,428 new
Ordinary Shares (the "Subscription Shares") at the Issue Price to raise
£25,000 (before expenses), (the "Subscription").
In addition to the Placing and the Subscription, Qualifying Shareholders will
be given the opportunity to subscribe for an aggregate of up to 2,938,284 new
Ordinary Shares (the "Open Offer Shares" and, together with the Placing Shares
and the Subscription Shares, the "New Shares") at the Issue Price through an
open offer to raise up to approximately £1 million (before expenses), (the
"Open Offer", and together with the Placing and the Subscription, the
"Fundraising").
It is intended that the Circular to Shareholders will be posted on 28 February
2023.
Highlights
· Placing and Subscription with new and existing
investors to raise £7.0 million (before expenses) through the issue of
20,000,000 new Ordinary Shares at the Issue Price.
· Open Offer at the Issue Price to raise up to a
further £1.0 million (before expenses).
· The First Placing is a condition to the
completion of the Collaboration and Co-Development agreement with Sebela
Pharmaceuticals, also announced today, which the Board believes significantly
de-risks the development and potential commercialisation of NTCD-M3 without
the Company being required to contribute to further clinical development
funding. The agreement with Sebela Pharmaceuticals, which could be worth up to
a maximum of US$570m to Destiny Pharma, includes initial upfront payment,
development and commercialisation milestone payments, as well double digit
royalties. The Company can also potentially agree additional partnering
arrangements for territories in Europe, UK and the rest of the world
(excluding China regional rights already held by China Medical Systems).
· The net proceeds of the Fundraising will allow
the Company to complete final Phase 3 clinical trial preparation for NTCD-M3,
Destiny pharma's lead asset for the prevention of Clostridioides difficile
infection (CDI) recurrence, including clinical trial material manufacturing;
progress XF-73 CMC manufacturing and Phase 3 preparation; to further progress
preclinical projects; and provide general working capital to strengthen the
balance sheet, a condition of the Collaboration and Co-development agreement
with Sebela Pharmaceuticals detailed below. The net proceeds of the placing
will fund Destiny Pharma through to late 2024.
· The New Shares, assuming full take-up of the
Open Offer, will represent approximately 24 per cent. of the Enlarged Share
Capital following Admission.
· The Issue Price represents a discount of
approximately 27 per cent. to the closing mid-market price of 48 pence per
existing Ordinary Share on 23 February 2023, being the latest practicable date
prior to this Announcement.
· Certain of the Directors have conditionally
agreed to subscribe for, in aggregate, 71,428 new Ordinary Shares in the
Subscription.
· The Second Placing is conditional, inter alia,
upon a general meeting being held to approve the resolutions (the
"Resolutions") required to implement the Second Placing. The general meeting
is expected to be held at 11.00 a.m. at the offices of Covington & Burling
LLP, 22 Bishopsgate, London, EC2N 4BQ on 16 March 2023 (the "General
Meeting"). A detailed timetable of events is set out in Appendix I of this
Announcement. The First Placing of £5 million is unconditional.
Neil Clark, CEO of the Company commented:
"This agreement is a landmark transaction for Destiny Pharma, as Sebela
Pharmaceuticals is not only planning to finance all future clinical
development and commercialisation costs of NTCD-M3 in the US, but also pay
success based development and commercialisation milestone payments, as well
double-digit royalties. The agreement could be worth up to a maximum of
US$570m plus royalty income, which represents a tremendous potential return on
investment in a little over two years since acquisition. We not only retain
the majority of worldwide rights to NTCD-M3 outside the US, but also have a
portfolio of other very valuable, novel drugs candidates in our portfolio,
including our XF-73 Nasal gel, which has completed a positive Phase 2b
clinical trial and is heading towards the final Phase 3 clinical studies. This
fundraising will put us in a robust position to continue to work on developing
and commercialising these assets.
"We are grateful for the continued support of existing shareholders and are
delighted to welcome a large number of new shareholders onto our register in
what was an upsized and oversubscribed Placing. We look forward to a year
of further progress and now have an excellent partner in Sebela and a strong
balance sheet to complete the development of NTCD-M3, which has a substantial
market opportunity and the potential to add significant value to the Company."
finnCap Limited ("finnCap") and Shore Capital Stockbrokers Limited ("Shore
Capital") acted as Joint Bookrunners in connection with the Placing.
The Company intends to publish and send a shareholder circular and notice of
General Meeting (the "Circular") to Shareholders in connection with the
Resolutions and the Open Offer on 28 February 2023. The Circular will be
available from the Company's website (www.destinypharma.com) once published.
The person responsible for arranging the release of this Announcement on
behalf of the Company is Shaun Claydon, Chief Financial Officer and Company
Secretary of the Company.
For further information, please contact:
Destiny Pharma plc
Neil Clark, CEO
Shaun Claydon, CFO
+44 (0)1273 704 440
pressoffice@destinypharma.com (mailto:pressoffice@destinypharma.com)
finnCap Ltd (Nominated Adviser, Joint Broker and Joint Bookrunner)
Geoff Nash / Abigail Kelly / George Dollemore, Corporate Finance
Alice Lane / Nigel Birks / Harriet Ward, ECM
+44 (0)20 7220 0500
Shore Capital (Joint Broker and Joint Bookrunner)
Daniel Bush / James Thomas / Lucy Bowden
+44 (0) 207 408 4090
Optimum Strategic Communications
Mary Clark / Nick Bastin / Jonathan Edwards / Eleanor Cooper
+44 (0) 7931 500066
DestinyPharma@optimumcomms.com (mailto:DestinyPharma@optimumcomms.com)
MC Services AG (Placing Agent)
Anne Hennecke / Andreas Burckhardt
+49-211-529252-12
Stern IR - US
Janhavi Mohite
+1-212-362-1200
Janhavi.Mohite@sternir.com
About Destiny Pharma
Destiny Pharma is a clinical stage, innovative biotechnology company focused
on the development of novel medicines that can prevent life-threatening
infections. Its pipeline has novel microbiome-based biotherapeutics and XF
drug clinical assets including NTCD-M3, a Phase 3 ready treatment for the
prevention of C. difficile infection (CDI) recurrence which is the leading
cause of hospital acquired infection in the US and also XF-73 nasal gel, which
has completed a positive Phase 2b clinical trial targeting the prevention of
post-surgical staphylococcal hospital infections including MRSA. It is also
co-developing SPOR-COV, a novel, biotherapeutic product for the prevention of
COVID-19 and other viral respiratory infections and has earlier grant funded
XF drug research projects.
For further information on the Company, please
visit https://www.destinypharma.com (https://www.destinypharma.com/)
This Announcement should be read in its entirety. In particular, you should
read and understand the information provided in the "Important Notices"
section of this Announcement.
IMPORTANT NOTICES
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS
ANNOUNCEMENT IS DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE
THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS
PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE
PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE: (1) IF IN
A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), QUALIFIED INVESTORS AS
DEFINED IN ARTICLE 2(e) OF REGULATION (EU) 2017/1129 (THE "EU PROSPECTUS
REGULATION"); (2) IF IN THE UNITED KINGDOM, QUALIFIED INVESTORS AS DEFINED IN
ARTICLE 2(e) OF REGULATION (EU) 2017/1129 AS IT FORMS PART OF UNITED KINGDOM
DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (THE "UK
PROSPECTUS REGULATION") WHO; (A) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL
SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED
(THE "ORDER") (INVESTMENT PROFESSIONALS) OR (B) FALL WITHIN ARTICLE 49(2)(a)
TO (d) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE
ORDER; AND (3) OTHERWISE, PERSONS TO WHOM IT IS OTHERWISE LAWFUL TO
COMMUNICATE IT TO (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT
PERSONS").
THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR RELIED ON
BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS
ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY
INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS
AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT
PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR
SUBSCRIPTION OF ANY SECURITIES IN DESTINY PHARMA PLC.
THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION
OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR
INDIRECTLY, IN THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS,
ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA) (THE "UNITED
STATES" OR THE "US") EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION OF THE UNITED STATES. THE PLACING SHARES ARE BEING OFFERED AND
SOLD ONLY OUTSIDE OF THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE
MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE SECURITIES ACT AND
OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS. NO PUBLIC OFFERING OF SECURITIES
IS BEING MADE IN THE UNITED STATES OR ELSEWHERE.
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, THE
REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH
RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT IS
NOT AN OFFER OF SECURITIES FOR SALE OR SUBSCRIPTION INTO THE UNITED STATES.
The distribution of this Announcement and/or the Placing and/or issue of the
Placing Shares in certain jurisdictions may be restricted by law. No action
has been taken by the Company, finnCap, Shore Capital, MC Services or any of
their respective affiliates, agents, directors, officers, consultants,
partners or employees ("Representatives") that would permit an offer of the
Placing Shares or possession or distribution of this Announcement or any other
offering or publicity material relating to such Placing Shares in any
jurisdiction where action for that purpose is required. Persons into whose
possession this Announcement comes are required by the Company, finnCap, Shore
Capital and MC Services to inform themselves about and to observe any such
restrictions.
This Announcement or any part of it is for information purposes only and does
not constitute or form part of any offer to issue or sell, or the solicitation
of an offer to acquire, purchase or subscribe for, any securities in the
United States, Australia, Canada, the Republic of South Africa or Japan or any
other jurisdiction in which the same would be unlawful. No public offering of
the Placing Shares is being made in any such jurisdiction.
All offers of the Placing Shares in the United Kingdom or the EEA will be made
pursuant to an exemption from the requirement to produce a prospectus under
the UK Prospectus Regulation. In the United Kingdom, this Announcement is
being directed solely at persons in circumstances in which section 21(1) of
the Financial Services and Markets Act 2000 (as amended) does not require the
approval of the relevant communication by an authorised person.
The Placing Shares have not been approved or disapproved by the US Securities
and Exchange Commission, any state securities commission or other regulatory
authority in the United States, nor have any of the foregoing authorities
passed upon or endorsed the merits of the Placing or the accuracy or adequacy
of this Announcement. Any representation to the contrary is a criminal offence
in the United States. The relevant clearances have not been, nor will they be,
obtained from the securities commission of any province or territory of
Canada, no prospectus has been lodged with, or registered by, the Australian
Securities and Investments Commission or the Japanese Ministry of Finance; the
relevant clearances have not been, and will not be, obtained from the South
Africa Reserve Bank or any other applicable body in the Republic of South
Africa in relation to the Placing Shares; and the Placing Shares have not
been, nor will they be, registered under or offered in compliance with the
securities laws of any state, province or territory of the United States,
Australia, Canada, the Republic of South Africa or Japan. Accordingly, the
Placing Shares may not (unless an exemption under the relevant securities laws
is applicable) be offered, sold, resold or delivered, directly or indirectly,
in or into the United States, Australia, Canada, the Republic of South Africa
or Japan or any other jurisdiction outside the United Kingdom.
Persons (including, without limitation, nominees and trustees) who have a
contractual right or other legal obligations to forward a copy of this
Announcement should seek appropriate advice before taking any such action.
This Announcement may contain, or may be deemed to contain, "forward-looking
statements" with respect to certain of the Company's plans and its current
goals and expectations relating to its future financial condition,
performance, strategic initiatives, objectives and results. Forward-looking
statements sometimes use words such as "aim", "anticipate", "target",
"expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may",
"could", "outlook" or other words of similar meaning. By their nature, all
forward-looking statements involve risk and uncertainty because they relate to
future events and circumstances which are beyond the control of the Company,
including amongst other things, United Kingdom domestic and global economic
business conditions, market-related risks such as fluctuations in interest
rates and exchange rates, the policies and actions of governmental and
regulatory authorities, the effect of competition, inflation, deflation, the
timing effect and other uncertainties of future acquisitions or combinations
within relevant industries, the effect of tax and other legislation and other
regulations in the jurisdictions in which the Company and its affiliates
operate, the effect of volatility in the equity, capital and credit markets on
the Company's profitability and ability to access capital and credit, a
decline in the Company's credit ratings; the effect of operational risks; and
the loss of key personnel. As a result, the actual future financial condition,
performance and results of the Company may differ materially from the plans,
goals and expectations set forth in any forward-looking statements. Any
forward-looking statements made in this Announcement by or on behalf of the
Company speak only as of the date they are made. Except as required by
applicable law or regulation, the Company expressly disclaims any obligation
or undertaking to publish any updates or revisions to any forward-looking
statements contained in this Announcement to reflect any changes in the
Company's expectations with regard thereto or any changes in events,
conditions or circumstances on which any such statement is based.
finnCap is authorised and regulated by the Financial Conduct Authority (the
"FCA") in the United Kingdom and is acting exclusively for the Company and no
one else in connection with the Placing or any other matters referred to in
this Announcement, and finnCap will not be responsible to anyone other than
the Company for providing the protections afforded to its clients or for
providing advice in relation to the Placing or any other matters referred to
in this Announcement.
Shore Capital Stockbrokers Limited ("Shore Capital") is authorised and
regulated by the FCA in the United Kingdom and is acting exclusively for the
Company and no one else in connection with the Placing or any other matters
referred to in this Announcement, and Shore Capital will not be responsible to
anyone other than the Company for providing the protections afforded to its
clients or for providing advice in relation to the Placing or any other
matters referred to in this Announcement.
MC Sevices is authorised and regulated in Germany according to §3 (2) WpIG as
a Tied Agent of CapSolutions GmbH and is acting exclusively for the Company
and no one else in connection with the Placing or any other matters referred
to in this Announcement, and MC Services will not be responsible to anyone
other than the Company for providing the protections afforded to its clients
or for providing advice in relation to the Placing or any other matters
referred to in this Announcement.
No representation or warranty, express or implied, is or will be made as to,
or in relation to, and no responsibility or liability is or will be accepted
by the finnCap, Shore Capital, MC Services or by any of their respective
Representatives as to, or in relation to, the accuracy or completeness of this
Announcement or any other written or oral information made available to or
publicly available to any interested party or its advisers, and any liability
therefor is expressly disclaimed.
No statement in this Announcement is intended to be a profit forecast or
estimate, and no statement in this Announcement should be interpreted to mean
that earnings per share of the Company for the current or future financial
years would necessarily match or exceed the historical published earnings per
share of the Company.
The price of shares and any income expected from them may go down as well as
up and investors may not get back the full amount invested upon disposal of
the shares. Past performance is no guide to future performance, and persons
needing advice should consult an independent financial adviser.
The New Shares to be issued pursuant to the Fundraising will not be admitted
to trading on any stock exchange other than the AIM market of the London Stock
Exchange.
Neither the content of the Company's website nor any website accessible by
hyperlinks on the Company's website is incorporated in, or forms part of, this
Announcement.
Information to Distributors
Solely for the purposes of the product governance requirements contained
within Chapter 3 of the FCA Handbook Production Intervention and Product
Governance Sourcebook (the "UK Product Governance Requirements"), and
disclaiming all and any liability, whether arising in tort, contract or
otherwise, which any "manufacturer" (for the purposes of the UK Product
Governance Requirements) may otherwise have with respect thereto, the New
Shares have been subject to a product approval process, which has determined
that such securities are: (i) compatible with an end target market of
investors who meet the criteria of retail investors and investors who meet the
criteria of professional clients and eligible counterparties, each as defined
in paragraph 3 of the FCA Handbook Conduct of Business Sourcebook; and (ii)
eligible for distribution through all distribution channels (the "Target
Market Assessment"). Notwithstanding the Target Market Assessment,
distributors (for the purposes of UK Product Governance Requirements) should
note that: (a) the price of the New Shares may decline and investors could
lose all or part of their investment; (b) the New Shares offer no guaranteed
income and no capital protection; and (c) an investment in the New Shares is
compatible only with investors who do not need a guaranteed income or capital
protection, who (either alone or in conjunction with an appropriate financial
or other adviser) are capable of evaluating the merits and risks of such an
investment and who have sufficient resources to be able to bear any losses
that may result therefrom. The Target Market Assessment is without prejudice
to the requirements of any contractual, legal or regulatory selling
restrictions in relation to the Fundraising. Furthermore, it is noted that,
notwithstanding the Target Market Assessment, finnCap, Shore Capital and MC
Services will only procure investors who meet the criteria of professional
clients and eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does not constitute:
(a) an assessment of suitability or appropriateness for the purposes of
Chapter 9A or 10A respectively of the FCA Handbook Conduct of Business
Sourcebook; or (b) a recommendation to any investor or group of investors to
invest in, or purchase, or take any other action whatsoever with respect to
the New Shares.
Each distributor is responsible for undertaking its own Target Market
Assessment in respect of the New Shares and determining appropriate
distribution channels.
The following is an extract from the Chairman's letter to be set out in
substantially the same form in the Circular.
1. Introduction
The Company has raised £7 million (before expenses) by way of a placing of
14,285,714 First Placing Shares, 5,642,858 Second Placing Shares and 71,428
Subscription Shares, in each case, at a price of 35 pence per share.
In addition, in order to provide Shareholders who have not taken part in the
Placing or the Subscription with an opportunity to participate in the proposed
issue of New Shares, the Company is providing all Qualifying Shareholders with
the opportunity to subscribe for up to 2,938,284 Open Offer Shares, to raise
up to approximately £1 million (before expenses), on the basis of 1 Open
Offer Share for every 25 Existing Ordinary Shares held on the Record Date, at
35 pence per share. Shareholders subscribing for their full entitlement under
the Open Offer may also request additional Open Offer Shares through the
Excess Application Facility.
The total amount that the Company could raise under the Fundraise is
approximately £8 million (before expenses), assuming that the Open Offer is
fully subscribed.
The net proceeds of the Fundraise will be used for clinical trial material
manufacturing and final Phase 3 clinical trial preparation for NTCD-M3,
progression of XF-73 CMC manufacturing and phase 3 preparation, to progress
preclinical projects, and to provide general working capital to strengthen the
balance sheet, a condition of the Collaboration and Co-Development agreement
with Sebela Pharmaceuticals as detailed below. finnCap and Shore Capital have
conditionally agreed, pursuant to the terms of the Placing Agreement, to use
their reasonable endeavours to procure Placees to subscribe for the Placing
Shares at the Issue Price. The Second Placing Shares are not subject to
clawback and are not part of the Open Offer. Neither the Placing nor the Open
Offer are being underwritten.
Each of Neil Clark, Shaun Claydon and Nick Rodgers are participating in the
Fundraise and have agreed to conditionally subscribe for 71,428 Subscription
Shares in aggregate at the Issue Price. The Directors will not take up any
entitlements they have under the Open Offer.
The First Placing does not require Shareholder approval because the First
Placing Shares will be issued pursuant to the Shareholder authorities granted
at the Company's 2022 annual general meeting. Accordingly, completion of the
First Placing and First Admission is expected to occur at 8.00 a.m. on 1 March
2023 or such later time and/or date as finnCap, Shore Capital and the Company
may agree, not being later than 8.30 a.m. on 31 March 2023.
The Second Placing, the Subscription and the issue of the Open Offer Shares
are conditional, inter alia, on the passing by Shareholders of the Resolutions
at the General Meeting, which is being convened for 11.00 a.m. on 16 March
2023.
The issue of the Second Placing Shares is conditional upon the passing of the
Resolutions and Second Admission.
Application has been made to the London Stock Exchange for the First Placing
Shares and the Second Placing Shares to be admitted to trading on AIM. It is
expected that Admission will become effective and that dealings in the First
Placing Shares will commence at 8.00 a.m. on 1 March 2023 and in respect of
the Second Placing Shares and the Subscription Shares at 8.00 a.m. on 17 March
2023 (being the business day following the General Meeting) or such later time
and/or dates as the Company, finnCap and Shore Capital may agree (being in any
event no later than 8.00 a.m. on 31 March 2023).
If the conditions relating to the issue of the Second Placing Shares are not
satisfied, or the Placing Agreement is terminated in accordance with its
terms, the Second Placing Shares will not be issued and the Company will not
receive the related subscription monies.
2. Background to and Reasons for the Fundraise
Background on the Company
Destiny Pharma is a clinical stage innovative biotechnology company focused on
the development of novel medicines that can prevent life-threatening
infections. The Company has a rich pipeline of de-risked assets including
NTCD-M3 and its XF antimicrobial drug platform which includes XF-73 Nasal, the
lead drug candidate developed from the XF platform which is expected to enter
Phase 3 in 2024, subject to the Company securing a partnering deal in 2023.
The Company also has a grant funded COVID-19/influenza preclinical programme
testing a nasal bacterial spray and two active dermal infection research
programmes using new XF-73 formulations with one programme being funded by a
US government group and the other by China Medical Systems ("CMS") in China.
The Company also has several XF platform research projects that are
progressing well and are largely funded by grants and non-dilutive funding.
In November 2020, the Company acquired the global rights to NTCD-M3, a Phase 3
ready asset targeting the prevention of C. difficile infection (CDI)
recurrence, the leading cause of hospital acquired infection in the U.S.
NTCD-M3 is the world's first, single strain, live biotherapeutic product being
developed to reduce the recurrence of CDI in the gut. By acquiring the global
rights for NTCD-M3, the Company extended its microbiome portfolio alongside
the SPOR-COV COVID-19 project that was added in September 2020. The Company
remains confident in the superior profile and potential positioning of NTCD-M3
as a targeted, safe, effective and easy to use biotherapeutic preventive
treatment. NTCD-M3 has delivered promising clinical data from previously
reported Phase 2 studies showing that it significantly reduces the levels of
recurrence in CDI patients. The planned Phase 3 study design for NTCD-M3 has
been approved by the FDA and the EMA and subject to the final development plan
the Phase 3 trial could commence in 2024.
NTCD-M3 Collaboration and Co-Development Agreement
Destiny Pharma's stated strategy is to seek partners to co-fund its assets
through Phase 3 trials to commercialisation. In line with this strategy,
having considered a range of potential partners for NTCD-M3, the Company has
signed an exclusive conditional collaboration and co-development agreement for
the North American (U.S., Canada, Mexico) rights of NTCD-M3 with Sebela
Pharmaceuticals(®) ("Sebela"), a U.S. pharmaceutical company with a
market-leading position in gastroenterology. Under the terms of the
Collaboration and Co-Development Agreement, it is anticipated that Sebela will
lead and finance all future North American and European clinical development
and commercialisation activities of NTCD-M3 in North America (U.S., Canada and
Mexico). Destiny Pharma will retain its NTCD-M3 rights for Europe and Rest of
the World (excluding China region that is owned by China Medical Systems) and
Sebela will hold a minority interest in any income generated in these
non-North American territories based on the clinical studies it is funding.
The Collaboration and Co-Development Agreement fully funds NTCD-M3 clinical
development through to commercialisation and includes upfront, development and
sales milestones, which could be worth up to $570 million, as well as
royalties, as follows:
· an initial upfront payment of $1 million;
· success-based development milestones of $19 million;
· sales revenues-based milestone payments up to $550 million; and
· tiered, royalties between 10% and 18% from launch.
The Collaboration and Co-Development Agreement is conditional on Destiny
Pharma strengthening its balance sheet with a net funding requirement of £4
million or other amount as agreed between the Company and Sebela. Subject to
First Admission becoming effective (which is expected to occur at 08.00 a.m.
on 1 March 2023), this condition will be satisfied. The Company will
continue to complete the ongoing manufacture of all clinical trial supplies
needed to undertake the required clinical studies. Sebela has reserved the
right to carry out an additional Phase 2 study to de-risk Phase 3 further at
its own cost (c.$3.5 million). If the results from additional Phase 2 study
are positive and Sebela does not proceed to Phase 3, but NTCD-M3 is
subsequently approved as a product, Destiny Pharma will reimburse the Phase 2
cost (capped at $3.5 million) over two years following commercial launch of
NTCD-M3 in the future. There are no additional clinical costs which are
expected be borne by Destiny Pharma.
The Board believes that the Collaboration and Co-Development Agreement:
· significantly de-risks the development of NTCD-M3 with no
additional clinical trial funding required by the Company;
· provides the Company with an excellent, specialist partner that
is well-capitalised to finance the final clinical trials for NTCD-M3 and which
is well placed to pursue regulatory approval with the FDA following the
completion of such clinical trials;
· provides Destiny Pharma with considerable potential future
returns in the form of both milestone payments and royalties;
· allows Destiny Pharma the ability to consider further partnering
agreements in respect of the European and Rest of World rights (excluding
China region) to NTCD-M3; and
· validates the Company's approach of seeking clinical development
partners for its pipeline of assets.
The completion of the Collaboration and Co-Development Agreement is
conditional upon the Fundraise. Accordingly, the Board has pursued the
Fundraise which it believes is in the best interests of the Company and its
shareholders.
About Sebela Pharmaceuticals(®)
Sebela Pharmaceuticals is a U.S. pharmaceutical company with a market leading
position in gastroenterology and a focus on innovation in women's health.
Braintree, a part of Sebela Pharmaceuticals, has been the market leader in
colonoscopy screening for over 35 years, having invented, developed and
commercialised a broad portfolio of innovative prescription colonoscopy
preparations and multiple gastroenterology products. Braintree also has
multiple gastroenterology programs in late-stage clinical development. In
addition, Sebela Women's Health has two next generation intra-uterine devices
for contraception in the final stages of clinical development. Sebela
Pharmaceuticals, with offices/operations in Roswell, GA; Braintree, MA; and
Dublin, Ireland; has annual net sales of approximately $200 million and has
grown to over 320 employees through strategic acquisitions and organic growth.
3. Use of Proceeds
The Company intends to use the net proceeds of £6.4 million from the
Fundraise as follows:
Clinical trial material manufacturing and final preparation for NTCD-M3 Phase £1.5 million
3 study
Progress XF-73 CMC manufacturing and Phase 3 clinical study preparation £2.5 million
Progress grant funded projects £0.3 million
General working capital/strengthening of balance sheet £2.1 million
£6.4 million (plus up to £1.0 million in Open Offer)
Additional funding received from the Open Offer will be used to progress the
XF-73 Nasal programme, as additional working capital and to progress the XF-73
Dermal and SPOR-COV projects towards clinical trials.
4. Current trading
As well as progressing partnering discussions relating to NTCD-M3 as detailed
above, during 2022 Destiny Pharma also defined the US and EU Phase 3 clinical
development plan for XF-73 Nasal, a novel nasal gel for the prevention of
post-surgical infections. Destiny Pharma is now running an active partnering
campaign for XF-73 Nasal with some early discussions already underway. The
target is to secure a commercialisation partner for the XF-73 Nasal programme
in 2023.
For both lead clinical programmes, the Company is seeking to close
partnerships with pharmaceutical companies that can lead the commercialisation
of NTCD-M3 and XF-73 Nasal in key markets, as well as contribute to the
funding and design of the required Phase 3 clinical trials.
Good progress has also been made on the Company's earlier pre-clinical
pipeline programmes and 2022 ends with two active dermal infection projects
running in the US and China, and with the completion of the SPOR-COV COVID-19
grant-funded collaboration. Further updates on these projects will be
announced in H1 2023.
5. Details of the Fundraise
The Company has raised £5m (before expenses) by way of the First Placing by
the proposed issue of, in aggregate, 14,285,714 Placing Shares at the Issue
Price.
The First Placing is being made pursuant to existing authorities to allot
shares for cash and disapply pre-emption rights under section 551 and section
570 of the Act, which were granted to the Directors at the Annual General
Meeting of the Company held on 27 May 2022. Accordingly, completion of the
First Placing and First Admission, which is expected to occur at 8.00 a.m. on
1 March 2023 or such later time and/or date as finnCap, Shore Capital and the
Company may agree, not being later than 8.30 a.m. on 31 March 2023.
The Company has raised £2 million (before expenses) by way of the Second
Placing and Subscription by the proposed issue of, in aggregate, 5,714,286
Placing Shares and Subscription Shares at the Issue Price.
The Company will require further share authorities to allot the Second Placing
Shares and the Open Offer Shares. Accordingly, the Second Placing is
conditional, inter alia, upon the passing of Resolution 1 and the Open Offer
is conditional, inter alia, on the passing of both Resolution 1 and Resolution
2 by Shareholders at the General Meeting. This means that whilst the Second
Placing can go ahead if the Open Offer resolution (Resolution 2) is not
passed, the Open Offer will only go ahead if the Second Placing also goes
ahead.
The Resolutions are contained in the Notice of General Meeting at the end of
the Circular. Second Admission is expected to occur at 8.00 a.m. on 17 March
2023 or such later time and/or date as finnCap, Shore Capital and the Company
may agree, not being later than 8.30 a.m. on 31 March 2023.
The Second Placing is conditional, inter alia, on the following:
a) First Admission having occurred;
b) the Resolutions being passed at the General Meeting;
c) the Placing Agreement not having been terminated prior to Second
Admission and becoming unconditional in all respects; and
d) Admission of the Second Placing Shares having become effective on or
before 8.00 a.m. on 17 March 2023 (or such later date and/or time as the
Company and the Joint Bookrunners may agree, being no later than 8.30 a.m. 31
March 2023).
In addition, each of Neil Clark, Shaun Claydon and Nick Rodgers are
participating in the Fundraise and have agreed to subscribe for 71,428
Subscription Shares in aggregate at the Issue Price.
Alongside the Placing, the Company is making the Open Offer pursuant to which
it may raise a further amount of up to approximately £1 million (before
expenses). The proposed issue price of 35 pence per Open Offer Share is the
same price as the price at which the New Shares are being issued pursuant to
the Placing.
The maximum aggregate number of New Shares that may be issued pursuant to the
Fundraise is 22,938,284 new Ordinary Shares, representing approximately 24
per cent of the Enlarged Share Capital following Admission.
The Issue Price represents a discount of approximately 27 per cent. to the
closing mid-market price of 48 pence per Existing Ordinary Share on 23
February 2023, being the last practicable date prior to the date of the
announcement of the Fundraise. The New Ordinary Shares (assuming take up of
the Open Offer in full) will represent approximately 24 per cent. of the
Enlarged Issued Share Capital and will, when issued, rank pari passu in all
respects with the other Existing Shares in issue.
The Placing Shares will, when issued and fully paid, rank pari passu in all
respects with the Ordinary Shares in issue at that time, including the right
to receive all dividends and other distributions declared, made or paid after
the date of Admission. The Placing Shares are not subject to clawback and are
not part of the Open Offer. The Placing is not underwritten.
The Placing Agreement
Pursuant to the terms of the Placing Agreement, finnCap and Shore Capital, as
agents of the Company, have conditionally agreed to use their reasonable
endeavours to procure subscribers for the Placing Shares at the Issue Price.
The Placing Agreement is conditional upon, inter alia, the Resolutions being
duly passed at the General Meeting, the Sebela Documents not being terminated,
rescinded or amended, and Admission becoming effective on or before 8.00 a.m.
on 1 March 2023 in respect of the First Placing Shares and 17 March 2023 in
respect of the Second Placing Shares and the Subscription Shares (or such
later time and/or date as the Company, finnCap and Shore Capital may agree,
but in any event by no later than 8.00 a.m. on 31 March 2023).
The Placing Agreement contains customary warranties from the Company in favour
of finnCap and Shore Capital in relation to, inter alia, the accuracy of the
information in the Circular and other matters relating to the Company and its
business. In addition, the Company has agreed to indemnify finnCap and Shore
Capital in relation to certain defined liabilities that they may incur in
respect of the Fundraise.
finnCap and Shore Capital have the right to terminate the Placing Agreement in
certain circumstances prior to Admission, in particular, if any of the Sebela
Documents are terminated, rescinded or amended, and in the event of a material
breach of the warranties given to finnCap and Shore Capital in the Placing
Agreement or a material adverse change affecting the business, financial
trading position or prospects of the Company.
The Placing Agreement also provides for the Company to pay all costs, charges
and expenses of, or incidental to, the Placing and Admission including all
legal fees (up to an agreed cap) and other professional fees and expenses.
The Placing Shares have not been made available to the public and have not
been offered or sold in any jurisdiction where it would be unlawful to do so.
Details of the Subscription and Directors' participation
The Company has conditionally raised approximately £25,000 (before expenses)
through the issue of 71,428 new Ordinary Shares at the Issue Price, pursuant
to the Subscription.
The Subscription has not been underwritten and, pursuant to the Subscription
Letters, is conditional, inter alia, upon:
i. the Placing Agreement having become unconditional in all respects
(save for the conditions relating to the Subscription) and not having been
terminated;
ii. Second Admission occurring by not later than 8.00 a.m. on 17 March
2023 (or such later time and/or date as the Company, finnCap and Shore
Capital may agree, not being later than 31 March 2023).
Accordingly, if any such conditions are not satisfied or, if applicable,
waived (if capable of waiver), the Subscription will not proceed.
Directors Neil Clark, Shaun Claydon and Nick Rodgers have conditionally agreed
to subscribe for an aggregate of 71,428 Subscription Shares as set out below.
Director Position Current Number of Ordinary Shares Current Holding (%) Number of Shares subscribed for in the Fundraise Resultant holding of the Enlarged Share Capital (%)*
Neil Clark Chief Executive Officer 88,462 0.12 28,571 0.12
Shaun Claydon Chief Financial Officer and Company Secretary 10,000 0.01 14,286 0.03
Nick Rodgers Chairman 106,073 0.14 28,571 0.14
*assuming full take-up of the Open Offer Shares under the Open Offer
Details of the Open Offer
Subject to the fulfilment of the conditions set out below, Qualifying
Shareholders may subscribe for Open Offer Shares in proportion to their
holding of Existing Ordinary Shares held on the Record Date. Shareholders
subscribing for their full entitlement under the Open Offer may also request
additional Open Offer Shares as an Excess Entitlement, up to the total number
of Open Offer Shares available to Qualifying Shareholders under the Open
Offer.
The Open Offer is conditional, inter alia, on the Placing becoming
unconditional in all respects and not being terminated before Admission.
Basic Entitlement
On, and subject to the terms and conditions of the Open Offer, the Company
invites Qualifying Shareholders to apply for their Basic Entitlement of Open
Offer Shares at the Issue Price. Each Qualifying Shareholder's Basic
Entitlement has been calculated on the following basis:
1 Open Offer Share for every 25 Existing Ordinary Shares held at the Record
Date
Basic Entitlements will be rounded down to the nearest whole number of
Ordinary Shares.
Excess Entitlement
Qualifying Shareholders are also invited to apply for additional Open Offer
Shares (up to the total number of Open Offer Shares available to Qualifying
Shareholders under the Open Offer) as an Excess Entitlement. Any Open Offer
Shares not issued to a Qualifying Shareholder pursuant to their Basic
Entitlement will be apportioned between those Qualifying Shareholders who have
applied for an Excess Entitlement at the sole discretion of the Board,
provided that no Qualifying Shareholder shall be required to subscribe for
more Open Offer Shares than he or she has specified on the Application Form or
through CREST.
Qualifying CREST Shareholder stock accounts will be credited as soon as
possible after 8.00 a.m. on 1 March 2023 with Basic and Excess Entitlements in
such Qualifying CREST Shareholder's name as at the Record Date.
Shareholders with no Basic Entitlement cannot apply for excess Open Offer
Shares.
The Open Offer Shares will, when issued and fully paid, rank pari passu in all
respects with the Ordinary Shares in issue at that time, including the right
to receive all dividends and other distributions declared, made or paid after
the date of Admission. The Open Offer is not underwritten.
Qualifying Shareholders should note that the Open Offer is not a "rights
issue". Invitations to apply under the Open Offer are not transferable unless
to satisfy bona fide market claims. Qualifying non-CREST Shareholders should
be aware that the Application Form is not a negotiable document and cannot be
traded. Qualifying Shareholders should also be aware that in the Open Offer,
unlike in a rights issue, any Open Offer Shares not applied for will not be
sold in the market nor will they be placed for the benefit of Qualifying
Shareholders who do not apply for Open Offer Shares under the Open Offer.
Overseas Shareholders
The Open Offer Shares have not been and are not intended to be registered or
qualified for sale in any jurisdiction other than the United Kingdom.
Accordingly, unless otherwise determined by the Company and effected by the
Company in a lawful manner, the Application Form will not be sent to
Shareholders with registered addresses in, or who are resident or located in
the United States or another Restricted Jurisdiction since to do so would
require compliance with the relevant securities laws of that jurisdiction. The
Company reserves the right to treat as invalid any application or purported
application for Open Offer Shares which appears to the Company or its agents
or professional advisers to have been executed, effected or dispatched in a
manner which may involve a breach of the laws or regulations of any
jurisdiction or if the Company or its agents or professional advisers believe
that the same may violate applicable legal or regulatory requirements or if it
provides an address for delivery of share certificates for Open Offer Shares
outside the UK, or in the case of a credit of Open Offer Shares in CREST, to a
CREST member whose registered address would not be in the UK.
Notwithstanding the foregoing and any other provision of the Circular or the
Application Form, the Company reserves the right to permit any Qualifying
Shareholder to apply for Open Offer Shares if the Company, in its sole and
absolute discretion, is satisfied that the transaction in question is exempt
from, or not subject to, the legislation or regulations giving rise to the
restrictions in question.
If a Qualifying Shareholder does not wish to apply for Open Offer Shares he
should not complete or return the Application Form or send a USE message
through CREST.
Qualifying non-CREST Shareholders
If you are a Qualifying non-CREST Shareholder you will have received a
personalised Application Form, which accompanies the Circular and which gives
details of your Basic Entitlement (as shown by the number of the Open Offer
Shares allocated to you). If you wish to apply for Open Offer Shares under the
Open Offer you should complete the accompanying Application Form in accordance
with the procedure for application set out in the Circular and on the
Application Form itself. The completed Application Form, accompanied by full
payment, should be returned by post, or by hand (during normal business hours
only), to the receiving agent Link Group Link Group, Corporate Actions, 10th
Floor, Central Square, 29 Wellington Street, Leeds, LS1 4DL, so as to arrive
as soon as possible and in any event no later than 11.00 a.m. on 15 March
2023.
Qualifying CREST Shareholders
Application will be made for the Open Offer Entitlements of Qualifying CREST
Shareholders to be credited to stock accounts in CREST. It is expected that
the Open Offer Entitlements will be credited to stock accounts in CREST on 1
March 2023. Applications through the CREST system may only be made by the
Qualifying CREST Shareholder originally entitled or by a person entitled by
virtue of a bona fide market claim. If you are a Qualifying CREST Shareholder,
no Application Form is enclosed but you will receive credits to your
appropriate stock account in CREST in respect of the Basic Entitlements to
which you are entitled. You should refer to the procedure for application set
out in the Circular. The relevant CREST instruction must have settled by no
later than 11.00 a.m. on 15 March 2023.
6. Related party transaction
The issue of Subscription Shares to Neil Clark, Shaun Claydon and Nick Rodgers
constitutes a related party transaction pursuant to Rule 13 of the AIM Rules
by virtue of their status as Directors of the Company. William Love, Debra
Barker, James Stearns, Aled Williams and Nigel Brooksby, being the independent
directors for this purpose, consider, having consulted with the Company's
nominated adviser, finnCap, that the terms of the Subscription with such
related parties is fair and reasonable insofar as the Company's Shareholders
are concerned.
7. Settlement and dealings
Application will be made to the London Stock Exchange for the First Placing
Shares to be admitted to trading on AIM. It is expected that Admission will
become effective and that dealings will commence in the First Placing Shares
at 8.00 a.m. on 1 March 2023.
Subject to the passing of Resolutions 1 and 2, it is expected that Second
Admission will become effective and that dealings in the Second Placing Shares
and the Subscription Shares will commence at 8.00 a.m. on 17 March 2023.
8. General Meeting
You will find set out at the end of the Circular a notice convening the
General Meeting to be held at the offices of Covington & Burling LLP, 22
Bishopsgate, London, EC2N 4BQ on 16 March 2023 at 11.00 a.m. where the
following Resolutions will be proposed:
Resolution 1 - An ordinary resolution, which is conditional upon the passing
of Resolution 2, to authorise the Directors to allot the Second Admission
Shares in connection with the Fundraise.
Resolution 2 - A special resolution, which is conditional upon the passing of
Resolution 1, which dis-applies statutory pre-emption rights in respect of the
allotment of the Second Admission Shares for cash in connection with the
Fundraise.
The Company intends to propose additional resolutions to put in place a new
authority to issue additional shares on a non pre-empive basis.
The authorities and the powers described in Resolutions 1 and 2 above will
(unless previously revoked or varied by the Company in general meeting) expire
on the date 3 months from the passing of such Resolutions or at the conclusion
of the next annual general meeting of the Company following the passing of the
Resolutions, whichever occurs first. The authority and the power described in
Resolutions 1 and 2 above are in addition to any like authority or power
previously conferred on the Directors.
9. Recommendation
Your Directors consider that the Fundraise and the authorities granted by the
Resolutions are in the best interests of the Company and its Shareholders as a
whole. Accordingly, your Directors unanimously recommend that you vote in
favour of the Resolutions as they intend to do in respect of their own
beneficial shareholdings of 7,131,246 Ordinary Shares, representing
approximately 9.7 per cent. of the Company's existing issued share capital.
APPENDIX I - EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2023
Announcement of the Placing, the Open Offer and the Subscription 24 February
Record Date for entitlements under the Open Offer Close of business on 23 February
Ex-entitlement Date for the Open Offer 8.00 a.m. on 27 February
Posting of the Circular (including the Notice of General Meeting), the Form of 28 February
Proxy and, to Qualifying Non-CREST Shareholders, the Application Form
Basic Entitlements and Excess Entitlements credited to stock accounts of As soon as possible on 1 March
Qualifying CREST Shareholders
First Admission and commencement of dealings in the Placing Shares and the 8.00 a.m. on 1 March
Subscription Shares on AIM
First Placing Shares in uncertificated form pursuant to First Admission As soon as possible after 8.00 a.m. on 1 March
expected to be credited to accounts in CREST
Recommended latest time and date for requesting withdrawal of Basic 4.30 p.m. on 9 March
Entitlements and Excess Entitlements from CREST
Latest time and date for depositing Basic Entitlements and Excess Entitlements 3.00 p.m. on 10 March
into CREST
Latest time and date for splitting Application Forms (to satisfy bona fide 3.00 p.m. on 13 March
market claims only)
Latest time and date for receipt of completed Application Forms and payment in 11.00 a.m. on 15 March
full under the Open Offer or settlement of relevant CREST instructions (as
appropriate)
Announcement of the results of the Open Offer 15 March
Latest time and date for receipt of CREST proxy instructions and registration 11.00 a.m. on 14 March
of online votes from Shareholders for General Meeting
Latest time and date for receipt of Forms of Proxy 11.00 a.m. on 14 March
General Meeting 1.00 a.m. on 16 March
Announcement of the results of the General Meeting 16 March
Second Admission and commencement of dealings in the Open Offer Shares on AIM 8.00 a.m. on 17 March
Open Offer Shares in uncertificated form pursuant to Second Admission expected As soon as possible after 8.00 a.m. on 17 March
to be credited to accounts in CREST (uncertificated holders only)
Dispatch of definitive share certificates for the New Shares in certificated Within 5 business days of
form
First Admission, or Second
Admission, where applicable
APPENDIX II - SHARE CAPITAL AND FUNDRAISE STATISTICS
Issue Price for each New Share 35 pence
Number of Existing Ordinary Shares in issue as at the date of this 73,457,105
announcement
Number of First Placing Shares to be issued pursuant to the First Placing 14,285,714
Number of Second Placing Shares to be issued pursuant to the Second Placing 5,642,858
Number of Subscription Shares to be issued pursuant to the Subscription 71,428
Basis of Open Offer 1 New Share for every 25 Existing Ordinary Shares
Maximum number of Open Offer Shares to be issued pursuant to the Open Offer 2,938,284
(assuming take-up in full of the Open Offer by Qualifying Shareholders)
Maximum number of New Shares to be issued* 22,938,284
Enlarged Share Capital immediately following Admission* 96,395,389
Market capitalisation at the Issue Price* £33.7 million
New Shares as a percentage of the Enlarged Share Capital* 24 per cent.
Estimated gross proceeds of the Fundraise* up to £8 million
Estimated net proceeds of the Fundraise* up to £7.4 million
ISIN - Ordinary Shares GB00BDHSP575
ISIN - Open Offer Basic Entitlements GB00BN4G1W32
ISIN - Open Offer Excess Entitlements GB00BN4G1X49
* assuming take-up in full of the Open Offer by Qualifying
Shareholders
DEFINITIONS
The following definitions apply throughout this announcement, unless the
context otherwise requires:
Act the Companies Act 2006 (as amended)
Admission together, First Admission and Second Admission
AIM the market of that name operated by the London Stock Exchange
AIM Rules the AIM Rules for Companies governing the admission to and operation of AIM
published by the London Stock Exchange as amended from time to time
AIM Rules for Nominated Advisers the AIM Rules for Nominated Advisers published by the London Stock Exchange as
amended from time to time
Applicant a Qualifying Shareholder or a person by virtue of a bona fide market claim who
lodges an Application Form or relevant CREST instruction under the Open Offer
Application Form the application form relating to the Open Offer and accompanying the Circular
for use by Qualifying non-CREST Shareholders
Articles the articles of association of the Company in force at the date of this
announcement
Basic Entitlement(s) the pro rata entitlement for Qualifying Shareholders to subscribe for Open
Offer Shares, pursuant to the Open Offer as described in Part IV of the
Circular
Board or Directors the directors of the Company
Braintree Braintree Laboratories Inc., a company incorporated in United States at 60
Columbian St W Braintree, MA, 02184-7367 United
CCSS the CREST Courier and Sorting Service, established by Euroclear to facilitate,
inter alia, the deposit and withdrawal of certificated securities
certified or in certificated form in relation to a share or other security, a share or other security that is
not in uncertificated form, that is not in CREST
CMS China Medical System Holdings Limited, a company listed on the Main Board of
The Stock Exchange of Hong Kong Limited with stock code: 00867
Collaboration and Co-Development Agreement the agreement between the Company and Braintree dated 24 February2023 pursuant
to which the Company will sublicense to Braintree and its affiliates, certain
intellectual property rights owned or controlled by NTCD and licensed to the
Company pursuant to an existing exclusive license agreement between the
Company and NTCD and dated 19 October 2020, as amended by the Deed of
Amendment
Committed Open Offer Shares means those Open Offer Shares taken up by Qualifying Shareholders
Company or Destiny Pharma Destiny Pharma plc, a company incorporated in England and Wales with
registered number 03167025 and whose registered office is at Sussex Innovation
Centre, Science Park Square, Falmer, Brighton, BN1 9SB
CREST the relevant system (as defined in the CREST Regulations) for the paperless
settlement of trades and the holding of uncertificated securities, operated by
Euroclear, in accordance with the same regulations
CREST Manual the rules governing the operation of CREST, as published by Euroclear
CREST member a person who has been admitted by Euroclear as a system-member (as defined in
the CREST Regulations)
CREST participant a person who is, in relation to CREST, a system participant (as defined in the
CREST Regulations)
CREST payment shall have the meaning given in the CREST Manual issued by Euroclear
CREST Regulations the Uncertified Securities Regulations 2001 (SI 2001 No. 3875), as amended
CREST sponsor a CREST participant admitted to CREST as a CREST sponsor
CREST sponsored member a CREST member admitted to CREST as a sponsored member (which includes all
CREST personal members)
Deed of Amendment the deed of amendment between the Company and NTCD dated 24 February 2023
relating to an existing exclusive license agreement between the Company and
NTCD and dated 19 October 2020
Disclosure and Transparency Rules the disclosure guidance and transparency rules made by the FCA pursuant to
section 73A of the FSMA, as amended from time to time
EMA the European Medicines Authority
Enlarged Share Capital the issued Ordinary Share capital of the Company immediately following
Admission, assuming full subscription of the Open Offer Shares are issued
EU the European Union
Euroclear Euroclear UK & International Limited, the operator of CREST
Excess Entitlement(s) Open Offer Shares in excess of the Basic Entitlement, but not in excess of the
total number of Open Offer Shares, allocated to a Qualifying Shareholder
pursuant to the Open Offer as described in Part IV of the Circular
Excess Application Facility the arrangement pursuant to which Qualifying Shareholders may apply for
additional Open Offer Shares in excess of the Basic Entitlement in accordance
with the terms and conditions of the Open Offer
Excess CREST Open Offer Entitlement in respect of each Qualifying CREST Shareholder, the entitlement to apply for
Open Offer Shares in addition to the Basic Entitlement credited to the
Qualifying CREST Shareholder's account in CREST, pursuant to the Excess
Application Facility, which is conditional on the Qualifying CREST Shareholder
taking up his Basic Entitlement in full and which may be subject to scaleback
in accordance with the provisions of the Circular
Excess Shares the Open Offer Shares for which Qualifying Shareholders may apply under the
Excess Application Facility in addition to their Basic Entitlement
Ex-entitlement Date the date on which the Existing Ordinary Shares are marked 'ex' for entitlement
under the Open Offer being 27 February 2023
Existing Ordinary Shares the 73,457,105 Ordinary Shares in issue as at the date of this announcement
being the entire issued share capital of the Company prior to Admission
FCA the Financial Conduct Authority of the UK
FDA the United States Food and Drug Administration
finnCap finnCap Ltd, the Company's Nominated Adviser and Joint Broker
First Admission the admission of the First Placing Shares to trading on AIM becoming effective
in accordance with Rule 6 the AIM Rules and references to First Admission
becoming "effective" shall be construed accordingly
First Placing the placing of the First Placing Shares at the Placing Price and on the terms
and subject to the conditions in the Placing Agreement
First Placing Shares 14,285,714 new Ordinary Shares which, when multiplied by the Placing Price,
have an aggregate value of £5 million and which are proposed to be allotted
and issued for cash pursuant to the First Placing subject to the First Placing
Conditions
Form of Proxy the form of proxy which accompanies the Circular for use in connection with
the General Meeting
FSMA the Financial Services and Markets Act 2000 (as amended)
Fundraise Together, the Placing, the Subscription and the Open Offer
General Meeting the general meeting of the Company, to be held at 11.00 a.m. on 16 March 2023
at the offices of Covington & Burling LLP, 22 Bishopsgate, London, EC2N
4BQ
HMRC His Majesty's Revenue & Customs
IP intellectual property
ISIN International Securities Identification Number
Issue Price 35 pence per New Share
London Stock Exchange London Stock Exchange plc
Member Account ID the identification code or number attached to any member account in CREST
MC Services MC Services AG as a tied agent of CapSolutions GmbH, the Company's Placement
Agent
Money Laundering Regulations the Money Laundering, Terrorist Financing and Transfer of Funds (Information
on the Payer) Regulations 2017, as amended
New Shares up to 22,938,284 new Ordinary Shares to be issued pursuant to the Fundraise
(being the Placing Shares, the Subscription Shares and the Open Offer Shares)
Notice of General Meeting the notice convening the General Meeting set out at the Circular
NTCD A US company registered in Illinois
NTCD-M3 a comprehensive research and clinical data set relating to an oral formulation
of spores of a non-toxigenic strain of C.difficile (REA type M3)
Official List the Official List of the FCA
Open Offer the conditional invitation to Qualifying Shareholders to apply for the Open
Offer Shares at the Issue Price on the terms and conditions outlined in the
Circular and, where relevant, in the Application Form
Open Offer Entitlements entitlements for Qualifying Shareholders to subscribe for Open Offer Shares
pursuant to the Basic Entitlement and the Excess Entitlement
Open Offer Shares up to 2,938,284 new Ordinary Shares to be issued pursuant to the Open Offer
Ordinary Shares ordinary shares of one penny each in the capital of the Company having the
rights and being subject to the restrictions contained in the Articles
Overseas Shareholders Shareholders with registered addresses, or who are citizens or residents of,
or incorporated in Restricted Jurisdictions
Participant ID the identification code or membership number used in CREST to identify a
particular CREST member or other CREST participant
Placees any person who has agreed to subscribe for Placing Shares
Placing the placing by finnCap and Shore Capital, as agents of, and on behalf of, the
Company, of the Placing Shares at the Issue Price on the terms and subject to
the conditions in the Placing Agreement
Placing Agreement the conditional agreement dated 24 February 2023 between the Company, finnCap
and Shore Capital
Placing Shares the 19,928,572 Placing Shares to be issued pursuant to the Placing
Prospectus Regulation Rules the prospectus regulation rules made by the FCA pursuant to section 73A of the
FSMA, as amended from time to time
Publicly Available Information any information published by the Company using a Regulatory Information
Service
Qualifying CREST Shareholders Qualifying Shareholders holding Existing Ordinary Shares which, on the
register of members of the Company on the Record Date, are in uncertificated
form in CREST
Qualifying Non-CREST Shareholders Qualifying Shareholders holding Existing Ordinary Shares which, on the
register of members of the Company on the Record Date, are in certificated
form
Qualifying Shareholders holders of Existing Ordinary Shares other than Overseas Shareholders, whose
names appear on the register of members of the Company on the Record Date as
holders of Existing Ordinary Shares and who are eligible to be offered Open
Offer Shares under the Open Offer in accordance with the terms and conditions
set out in the Circular
Receiving Agent, Registrar or Link Group Link Group, a trading name of Link Market Services Limited, the Company's
registrar and receiving agent
Record Date 23 February 2023
Regulatory Information Service a service approved by the FCA for the distribution to the public of AIM
announcements and included within the list on the website of the FCA
Resolutions the resolutions set out in the Notice of General Meeting
Restricted Jurisdictions the United States, Australia, Canada, Japan, the Republic of South Africa and
any other jurisdiction where the extension or availability of the Open Offer
would breach any applicable law or regulations
Sebela Pharmaceuticals a U.S. pharmaceutical company with a market leading position in
gastroenterology and a focus on innovation in women's health. Sebela
Pharmaceuticals owns Braintree Laboratories
Securities Act the United States Securities Act of 1933, as amended
Second Admission admission of the Second Placing Shares and the Open Offer Shares to trading on
AIM becoming effective in accordance with Rule 6 of the AIM Rules
Second Placing the conditional placing by finnCap and Shore Capital (each as agent of the
Company) of the Second Placing Shares at the Issue Price subject to, inter
alia, the passing of the Resolutions and Second Admission
Shareholders registered holders of Ordinary Shares
Shore Capital Shore Capital Stockbrokers Limited, the Company's Joint Broker
SPOR-COV a novel bacterial formulation designed to prevent coronavirus and other viral
respiratory infections
Subscribers Neil Clark, Shaun Claydon and Nick Rodgers, each being a Director
Subscription the conditional direct subscription by the Subscribers for the Subscription
Shares at the Issue Price in accordance with the Subscription Letters
Subscription Letters the subscription letters dated 24 February 2023 between the Company and the
Subscribers
Subscription Shares the 71,428 new Ordinary Shares to be issued pursuant to the Subscription
UK the United Kingdom of Great Britain and Northern Ireland
uncertificated or in uncertificated form a share or other security recorded on the relevant register of the share or
security concerned as being held in uncertificated from in CREST and title to
which, by virtue of the CREST Regulations, may be transferred by means of
CREST
US or United States the United States of America, its territories and possessions, any state of
the United States and the District of Columbia
USE unmatched stock event
XF-73 Dermal a novel dermal formulation for the treatment of antibiotic resistant skin
infections associated with open wounds
XF-73 Nasal a nasal gel for prevention of post-surgical infections
A reference to £ is to pounds sterling, being the lawful currency of the UK.
A reference to $ or US$ is to United States dollars, being the lawful currency
of the US.
A reference to € or Euro is to the lawful currency of the EU.
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