REG - Immupharma PLC - £2.91m fundraising; related party transactions

ImmuPharmaAnnouncement

13/02/2025 07:00

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RNS Number : 9292W  Immupharma PLC  13 February 2025

13 February 2025

 

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ImmuPharma PLC

 

("ImmuPharma" or the "Company")

 

Subscription & Oversubscribed Placing to raise c.£2.91 million

 

Sharing Agreement

 

Related Party Transactions

 

ImmuPharma PLC (LSE AIM: IMM), the specialist drug discovery and development
company, is pleased to announce an equity fundraise of c.£2.91 million,
utilising existing authorities to allot shares (the "Fundraise").

 

The Fundraise comprises a) an oversubscribed placing to raise gross proceeds
of £1.034 million through the issue of 27,586,667 new ordinary shares of 1
pence each in the Company ("Ordinary Shares") with institutional and other
investors at a price of 3.75 pence per Ordinary Share (the "Issue Price"); and
b) a £1.875 million subscription with current 6.5% shareholder Lanstead
Capital Investors L.P ("Lanstead") through the issue of 50,000,000 new
Ordinary Shares at the Issue Price. The Company has also entered into a
sharing agreement ("Sharing Agreement") with Lanstead.

 

Highlights

 

·    Subscription for 50,000,000 new Ordinary Shares (the "Subscription
Shares") by Lanstead at the Issue Price of 3.75 pence per share (the "Lanstead
Subscription"), with an associated Sharing Agreement ("Sharing Agreement")
(together the "2025 Lanstead Agreements").

 

·    Placing of 27,586,667 new Ordinary Shares (the "Placing Shares") with
institutional and other investors at the Issue Price of 3.75 pence per share
to raise £1.034 million (the "Placing").

 

·    The Issue Price of 3.75 pence represents a 12.9 per cent. discount to
the closing mid-market price (of 4.305 pence) of the Ordinary Shares on 12
February 2025, the latest business date prior to the announcement of the
Fundraise.

 

·    The £1.875 million gross proceeds of the Lanstead Subscription will
be pledged by the Company pursuant to the Sharing Agreement with Lanstead. The
Sharing Agreement, details of which are set out below, entitles the Company to
receive back those proceeds on a pro rata monthly basis over a period of seven
months, commencing after the completion of the amended (see below) 2023
Lanstead Sharing Agreement, which is expected to be in May 2025, subject to
adjustment upwards or downwards each month depending on the Company's share
price at the time. The Sharing Agreement provides the opportunity for the
Company to benefit from positive future share price performance.

 

·    The gross proceeds of the Fundraise will be used primarily to fund:

 

·     further investment into the P140 autoimmune technology platform;

·     strengthening the Company's balance sheet ahead of detailed
discussions with large pharma companies on potential licensing deals on P140;

·     general working capital; and

·     cash expenses associated with the Fundraise of c.£0.2m

 

The Subscription and Placing have been arranged by the Company's broker,
Stanford Capital Partners Limited ("Stanford").

 

Commenting on the Fundraise, Tim McCarthy, Chairman and CEO of ImmuPharma,
said:

 

"We kickstarted this year with a key announcement on 9 January, announcing
innovative groundbreaking advancements in our preclinical research program
focused on P140 and the pathogenesis of autoimmune diseases. This new
discovery yielded data that provided novel insights into autoimmune disease
mechanisms, whilst, in addition, supporting the Mechanism of Action of our
P140 technology platform and its significance for being effective in a number
of auto-immune diseases including our lead program, for lupus.

 

"Following on from this, we believe that 2025 will be a transformational year
for ImmuPharma, with further positive news announcements within the P140
technology platform and a clear focus on securing partnering deals for all the
assets across our development portfolio."

 

Rationale for the Fundraise

 

Following the major change in the composition of the Company's board of
directors and management, in mid-2021, ImmuPharma has undergone a significant
corporate reorganisation, leading to a much more streamlined (and effective)
corporate structure, which in turn has also resulted in a much lower level of
fixed overheads. In addition, the Company's product development portfolio has
been expanded and refocused into auto-immunity and anti-infectives, with
positive developments since 2021 across all the portfolio, including the
Company's P140 technology platform.

 

This was highlighted most recently on 9 January 2025 when the Company
announced innovative groundbreaking advancements in its preclinical research
program focused on P140 and the pathogenesis of autoimmune diseases. This new
discovery yielded data that provides novel insights into autoimmune disease
mechanisms.

 

Importantly for our autoimmune therapy P140, especially for our lead
indication in SLE (Lupus), those findings pave the way for:

 

·    Earlier and more accurate diagnostics

·    Identifying patients most likely to respond to P140 therapy

·    Improved monitoring of the patient's response to treatment with P140

 

Additional funding at this pivotal time will allow the management to invest
further into the P140 platform. This in turn will strengthen the Company's
negotiating position in ongoing licensing negotiations, as well as to
contribute to general working capital requirements.

Being able to apply this new funding to the P140 program will deliver quicker
results and also be a major contributor to regular positive news flow and
program updates which will have a major impact to drive a positive upward
movement in the share price, thereby increasing value for all shareholders.

Further information on the Lanstead Subscription

 

Pursuant to the subscription agreement between the Company and Lanstead (the
"Subscription Agreement"), 50,000,000 new Ordinary Shares have today been
allotted and will be issued, conditional upon Admission, to Lanstead at 3.75
pence per Subscription Share for an aggregate subscription value of £1.875
million.

 

The Lanstead Subscription proceeds of £1.875 million will immediately
following Admission be pledged to Lanstead under the Sharing Agreement under
which Lanstead will then make, subject to the terms and conditions of the
Sharing Agreement, monthly settlements (subject to adjustment upwards or
downwards) to the Company over a period of seven months, commencing in May
2025, as detailed below. As a result of entering into the Sharing Agreement,
the aggregate amount received by the Company under the Lanstead Subscription
and the Sharing Agreement may be more or less than £1.875 million, as further
explained below. Notwithstanding the Subscription Price of 3.75 pence,
shareholders should note that the share price of the Company needs to be on
average over the seven months of the Sharing Agreement at or above the
Benchmark Price of 5.0 pence per share for the Company to receive at least, or
more than, the gross Subscription of £1.875 million.

 

The Subscription Shares will be issued credited as fully paid and will rank
pari passu in all respects with the Company's existing issued Ordinary Shares.

The Lanstead Subscription is conditional, inter alia, on admission of the
Subscription Shares to trading on AIM, and there being: (i) no breach of
certain customary warranties given by the Company to Lanstead at any time
prior to Admission (which is expected on or around 20 February 2025); and (ii)
no force majeure event occurring prior to Admission.

 

The Sharing Agreement

 

In addition to the Lanstead Subscription, the Company has entered into the
Sharing Agreement, pursuant to which ImmuPharma will pledge the £1.875
million gross proceeds of the Lanstead Subscription to Lanstead. The Sharing
Agreement will enable the Company to share in any share price appreciation
over the Benchmark Price (as defined below). However, if the Company's share
price is less than the Benchmark Price then the amount received by the Company
under the Sharing Agreement will be less than the gross proceeds of the
Lanstead Subscription which were pledged by the Company to Lanstead at the
outset.

 

The Sharing Agreement provides that the Company will receive seven monthly
settlement amounts (6 months of £267,857.14 and the final month of
£267,857.16) as measured against a benchmark share price of 5.0 pence per
Ordinary Share (the "Benchmark Price"). The monthly settlement amounts for the
Sharing Agreement are structured to commence in May 2025.

 

If the measured share price (the "Measured Price"), calculated as the average
of each day's volume weighted share price ("VWAP") of the Company's Ordinary
Shares over a 20 day period prior to the monthly settlement date, exceeds the
Benchmark Price, the Company will receive more than 100 per cent. of that
monthly settlement due on a pro rata basis according to the excess of the
Measured Price over the Benchmark Price. There is no upper limit placed on the
additional proceeds receivable by the Company as part of the monthly
settlements and the amount available in subsequent months is not affected.
 Should the Measured Price be below the Benchmark Price, the Company will
receive less than 100 per cent. of the monthly settlement calculated on a pro
rata basis and the Company will not be entitled to receive the shortfall at
any later date. As such, the final determination of the total amounts to be
received under the Sharing Agreement will only be known after the seven months
have elapsed.

 

For example, if on a monthly settlement date the calculated Measured Price
exceeds the Benchmark Price by 10 per cent., the settlement on that monthly
settlement date will be 110 per cent. of the amount due from Lanstead on that
date.  If on the monthly settlement date the calculated Measured Price is
below the Benchmark Price by 10 per cent., the settlement on the monthly
settlement date will be 90 per cent. of the amount due on that date. Each
settlement as so calculated will be in final settlement of Lanstead's
obligation on that settlement date.

 

Assuming the Measured Price equals the Benchmark Price on the date of each and
every monthly settlement, ImmuPharma would receive aggregate proceeds of
£1.875million (before expenses) from the Lanstead Subscription and Sharing
Agreements. Examples of the proceeds from the Sharing Agreement to be received
each month, based upon varying levels of average share price in the month, are
shown in the Appendix to this announcement.

The Company will pay Lanstead's legal costs of approximately £15,000 incurred
in connection with the Lanstead Subscription and in entering into the Sharing
Agreement and, in addition, has agreed to issue to Lanstead 3,500,000 new
Ordinary Shares ("Value Payment Shares") in connection with entering into the
Sharing Agreement.

In no event will fluctuations in the Company's share price result in any
increase in the number of Subscription Shares issued by the Company or
received by Lanstead. The Sharing Agreement allows both Lanstead and the
Company to benefit from future share price appreciation.

 

In total, Lanstead will be issued with 50,000,000 new Ordinary Shares pursuant
to the Lanstead Subscription which, when issued, will equate (together with
the 3,500,000 Value Payment Shares) to approximately 10.7 per cent. of the
Company's enlarged issued share capital following the Subscription and the
Placing.

 

No shares, warrants or additional fees are owed to Lanstead at any point
during this agreement other than those disclosed above.

 

The Sharing Agreement is similar in structure to those undertaken by the
Company with Lanstead in February 2016, June 2019, March 2020, December 2021,
August 2022 and August 2023 respectively. The first five of these arrangements
have completed their settlement periods. The February 2016 agreement yielded a
net gain to ImmuPharma of approximately £0.6 million more than originally
subscribed by Lanstead. The June 2019 and March 2020 agreements yielded
approximately £0.9 million and £1.0 million less than originally subscribed
by Lanstead respectively. The December 2021 and August 2022 arrangements
yielded £1.7 million and £0.7 million less than originally subscribed by
Lanstead respectively. The August 2023 arrangement (the "2023 Lanstead Sharing
Agreement") runs to September 2025 and is currently yielding approximately
£0.2 million less than the pro rata amount originally subscribed by Lanstead
on cumulative settlements to date. (It has been agreed that this arrangement
is accelerated as set out below).

 

The February 2016 agreement yielded a net gain due to the share price
appreciation during its duration, which coincided with the progression of
Lupuzor™ through its first Phase 3 clinical trial. The subsequent agreements
have all coincided with a prolonged period of share price underperformance due
to multiple factors, including the negative macro-economic environment and a
period of complete reorganisation of the Company and its development
portfolio, following a change in the board of directors and the appointment of
a new management team in 2021.

 

The new management team have simplified the Group structure from five to two
companies; reduced overheads by over 50%; expanded the development portfolio
and recently (in January 2025) announced breakthrough results in its flagship
P140 autoimmune platform.

 

With the anticipation of further regular positive newsflow as the Company
moves through 2025, including additional data from P140 pre-clinical studies;
and licence and collaboration deals across the development portfolio, the
Directors have an expectation that this new Lanstead agreement will yield a
net gain.

 

The Directors believe that the Sharing Agreement potentially provides a number
of benefits to the Company and its shareholders including: the certainty of
additional investment, albeit the quantum of returns under the agreement is
dependent on the Company's share price; the opportunity to benefit from
positive future share price performance; and that the amount of shares issued
is fixed, together with the cost of their issue.

 

Amendment to the 2023 Lanstead Sharing Agreement

 

The 2023 Lanstead Sharing Agreement was an agreement covering a period of 24
months. Full details were set out in the Company's regulatory announcement
dated 31 August 2023.

The Company has received a total of £0.5 million under the 2023 Lanstead
Sharing Agreement from the 17 settlements due to date. Seven settlements of
£41,666.67 per month (on the assumption the 2023 Lanstead Sharing Agreement
Benchmark Price of 2.6667 pence equals the Measured Price for each period)
under the agreement remain due for the months from March 2025 through to
September 2025.

It has been agreed that each of the settlements for March , April and May 2025
are accelerated to be received in March 2025 (with the calculation for the 3
months based on the 2023 Lanstead Sharing Agreement formula for the 20 days in
March), and that each of the settlements for June, July and August 2025 are
accelerated to be received in April 2025 (with the calculation for the 3
months based on the 2023 Lanstead Sharing Agreement formula for the 20 days in
April 2025), and that the September settlement is cancelled.

The settlements due under the February 2025 Lanstead Sharing Agreement will
commence in the month (expected to be May 2025) following the receipt of the
April 2025 settlement referred to in the paragraph above.

 

Placing

 

Certain institutional and other investors have subscribed for 27,586,667
Placing Shares directly with the Company to raise £1,034,500 for the Company.

 

The Placing Shares will be issued credited as fully paid and will rank pari
passu in all respects with the Company's existing issued Ordinary Shares.

 

The Placing is conditional, among other things, upon  Admission (which is
expected to occur on or around 20 February 2025) becoming effective.

Future Funding Requirements

The Directors are confident that the Fundraise, together with existing funding
and funding arrangements, will provide the Company with a clear cash runway to
at least the end of 2026.

This belief is based on assumptions, which include the Directors' estimation
of the likely level of receipts under (i) the 2023 Lanstead Agreement (ii) the
current February 2025 Lanstead Agreements (which are variable and depend upon
the level of the Company's Measured Price versus the Benchmark Price each
month).

In the event that the Company receives less funds than expected by the
Directors, the Company will undertake measures to limit or defer cash outflows
from the business in the near term, (which include the Directors deferring a
proportion of their salaries) until such time as the business is able to meet
these payments, or seek to introduce further funding to the business.

Conversely, in the event of share price performance in excess of the
assumptions made, the Company would have a longer cash runway as there would
be a higher level of cash receipts under the various Lanstead agreements. In
addition, a higher share price would increase the likelihood of the exercise
of outstanding options and warrants, which would result in further cash
receipts for the Company, though there is no guarantee this will occur.

Related Party Transactions

 

Lanstead is interested in 27,090,404 Ordinary Shares (representing 6.5 per
cent. of the current issued share capital). Until 6 August 2024 Lanstead was a
substantial shareholder in the Company, therefore (i) the participation by
Lanstead in the 2025 Lanstead Agreements (including the issue of the Value
Payment Shares) and (ii) the amendment to the 2023 Lanstead Sharing Agreement
constitute related party transactions under the AIM Rules for Companies.

 

The Directors (all of whom are independent of Lanstead), having consulted with
SPARK Advisory Partners Limited ("SPARK"), the Company's nominated adviser,
consider that (i) the terms of the 2025 Lanstead Agreements and (ii) the
amendment to the 2023 Lanstead Sharing Agreement, are fair and reasonable
insofar as the Company's shareholders are concerned.

 

Other Share Issues

 

The Company will issue 200,000 new Ordinary Shares to SPARK, and 2,000,000 new
Ordinary Shares to Stanford at an issue price of 3.75 pence per share in lieu
of fees ("Fee Shares"). The Fee Shares will be issued credited as fully paid
and will rank pari passu in all respects with the Company's existing issued
Ordinary Shares.

 

Application for admission to trading on AIM ("Admission"), and expected dates
of Admission

 

Application will be made for the Subscription Shares, the Placing Shares, the
Value Payment Shares and the Fee Shares to be admitted to trading on the AIM
market of the London Stock Exchange.

 

It is anticipated that Admission ("Admission") of the Subscription Shares, the
Placing Shares, the Value Payment Shares and the Fee Shares will occur at 8.00
a.m. on or around 20 February 2025.

 

Authority to allot shares

The allotment of the Subscription Shares, the Placing Shares, the Value
Payment Shares and the Fee Shares is being made pursuant to existing
authorities to allot shares and other relevant securities and to disapply
pre-emption rights under section 551 of the Companies Act 2006, which the
Directors were given at the Company's Annual General Meeting held on 28 June
2024.

About Lanstead

 

Lanstead is a global investment firm that provides funding for ongoing
business objectives to listed small and mid-cap growth companies. In London,
Lanstead focus on equity investments in companies already listed or quoted on
the London Stock Exchange or European exchanges and on management teams with a
clear growth strategy.

 

Lanstead's extensive experience allows it to invest in most industries,
focusing on providing supportive, longer term capital that rewards company
growth. Companies with Lanstead on the shareholder register via an equity
placement to Lanstead with an accompanying sharing agreement can benefit from
a unique and flexible approach to finance growth. This provides the
opportunity for companies to benefit from additional cash beyond the original
subscription proceeds without having to issue additional shares.

 

Further information is available at www.Lanstead.com
(http://www.Lanstead.com)

 

 

Appendix - example Lanstead Sharing Agreement Returns

 

In relation to each of the months in the 7 month calculation period:

 

Average 20 Day VWAP
                                 3.75p
                   5.0p
                        6.25p

 

Benchmark Price
 
 5.0p                      5.0p
                                   5.0p
 
 

 20 day VWAP as % of Benchmark Price
      75%
100%                             125%

 

Settlement from Lanstead in the month               £200,892
                  £267,857
       £334,821

 

Proceeds over 7 month period

if Average 20 Day VWAP is at this level

for the entire
period
             £1,406,250           £ 1,875,000
               £2,343,750

 
 

 For further information please contact:

ImmuPharma PLC (www.immupharma.com (http://www.immupharma.com) )  + 44 (0) 207 152 4080

 Tim McCarthy, Chief Executive Officer

 Lisa Baderoon, Head of Investor Relations                         + 44 (0) 7721 413496

 SPARK Advisory Partners Limited (NOMAD)                           +44 (0) 203 368 3550 (about:blank)

 Neil Baldwin

 Stanford Capital Partners (Joint Broker)                          +44 20 3650 3650

 Patrick Claridge

 Bob Pountney

 SI Capital (Joint Broker)

 Nick Emerson

                                                                   +44 (0) 1483 413500

 

Notes to Editors

 

About ImmuPharma PLC

ImmuPharma PLC (LSE AIM: IMM) is a specialty biopharmaceutical company that
discovers and develops peptide-based therapeutics. The Company's portfolio
includes novel peptide therapeutics for autoimmune diseases and
anti-infectives. The lead program, P140, is a unique non-immunosuppressive
peptide for the treatment of SLE (Systemic Lupus Erythematosus) and CIDP
(Chronic Idiopathic Demyelinating Polyneuropathy) and preclinical models
suggest therapeutic activity for many other autoimmune diseases.

 

For additional information about ImmuPharma please visit www.immupharma.co.uk

 

ImmuPharma's LEI (Legal Entity Identifier) code: 213800VZKGHXC7VUS895.

 

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