REG - ValiRx PLC - Issue of Equity
30/06/2022 10:45
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RNS Number : 8234Q ValiRx PLC 30 June 2022
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN (THE "ANNOUNCEMENT") IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, CANADA,
AUSTRALIA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO MIGHT
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH
JURISDICTION.
THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION,
RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE
ACQUIRE ANY SECURITIES OF THE COMPANY.
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE GROUP TO
CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER ARTICLE 7 OF THE MARKET
ABUSE REGULATION (EU) 596/2014 AS AMENDED BY REGULATION 11 OF THE MARKET ABUSE
(AMENDMENT) (EU EXIT) REGULATIONS 2019/310. UPON THE PUBLICATION OF THIS
ANNOUNCEMENT VIA REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS
NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
ValiRx PLC
("ValiRx" or the "Company")
Placing of 15,000,000 Ordinary Shares at issue price of 10p per share
Proposed Broker Option for up to 10,000,000 Ordinary Shares at the Issue Price
London, UK - ValiRx Plc (AIM: VAL), a life sciences company focusing on
early-stage cancer therapeutics and women's health, announces a Placing to
raise £1.5 million (before expenses) through the allotment and issue of
15,000,000 New Ordinary Shares at the Issue Price of 10 pence per Ordinary
Share. In addition, to provide shareholders and other investors who did not
initially have the opportunity to participate in the Placing to now do so, the
Company is granting an option (the "Broker Option") allowing additional
subscriptions up to £1.0 million with priority given to existing shareholders
of the Company.
The net proceeds from the Fundraising will be used to provide working capital
for the Group to continue development of its assets, as well as strengthen its
balance sheet with a view to pursuing its acquisitive tCRO strategy.
Fundraising highlights
· Placing to raise £1.5 million from new and existing shareholders to
provide working capital for the Group and strengthen its balance sheet to
progress the Company's acquisitive tCRO (Translational Contract Research
Organisation) model
· Conditional Broker Option to provide shareholders and other investors
who did not initially have the opportunity to participate in the Placing to
participate in the Fundraise for up to £1.0 million
· Issue Price of 10p per share represents a discount of 38% to closing
market price on last practicable Business Day prior to this announcement
Dr Kevin Cox, Non-Executive Chairman, commented:
"The Company welcomes the support of new and existing shareholders in this
fundraising that will enable ValiRx to continue to develop its preclinical
pipeline of novel treatments for cancer and women's health. Furthermore, the
fundraising marks an important milestone in the Company's newly adopted
strategy, better positioning it to identify and acquire service companies to
build a leading translational contract research organisation with a view to
adding further revenue streams to the business - the tCRO concept."
For more information, please contact:
ValiRx plc Tel: +44 (0) 2476 796496
Dr Suzanne Dilly, CEO www.valirx.com (http://www.valirx.com/)
Suzanne.Dilly@valirx.com
Cairn Financial Advisers LLP (Nominated Adviser) Tel: +44 (0) 20 7213 088
Liam Murray/Jo Turner/Ludovico Lazzaretti
Cenkos Securities plc (Joint Broker) Tel: +44 (0) 20 7397 8900
Dale Bellis/Michael Johnson (Sales)
Callum Davidson/Giles Balleny (Corporate Finance)
Turner Pope Investments (Joint Broker to the Placing) Tel: +44 (0) 20 3657 0050
James Pope / Andy Thacker
Notes for Editors
About ValiRx
ValiRx accelerates the development of treatments in oncology and women's
health to improve patient lives. We provide the scientific, financial and
commercial framework towards enabling rapid translation of innovative science
into clinical development.
With our extensive and proven experience in research and drug development, we
select and incubate promising novel drug candidates and guide them through an
optimised process of development, from pre-clinical studies to clinic and
investor-ready assets.
Integrating science and business
We connect diverse disciplines across scientific, technical and commercial
domains, with the aim of achieving a more streamlined, less costly, drug
development process. We work closely with our selected collaborators and
leverage the combined expertise required for science to advance.
Lead candidates from our portfolio are out-licensed or partnered with
investors through ValiRx subsidiary companies for further clinical development
and commercialisation. https://www.valirx.com/ (https://www.valirx.com/)
The Company listed on the AIM Market of the London Stock Exchange in October
2006 and trades under the ticker symbol: VAL.
Introduction
The Company announces a Placing to raise £1.5 million (before expenses)
through the allotment and issue of 15,000,000 New Ordinary Shares at the Issue
Price of 10 pence per Ordinary Share. The net proceeds from the Placing will
be used to provide additional investment and growth capital for the Group, as
well as strengthen its balance sheet to facilitate the Group's new strategy of
becoming a tCRO (Translational Contract Research Organisation) business
through future acquisition of revenue generating CROs. The Placing is not
being underwritten.
In addition, to provide shareholders and other investors who did not initially
have the opportunity to participate in the Placing to now do so, the Company
is granting a option (the "Broker Option") allowing subscriptions up to £1.0
million with priority given to existing shareholders of the Company.
The Issue Price represents a discount of 38 per cent. to the closing
mid-market price of 16.25 pence per Existing Share on 29 June 2022 (being the
last practicable Business Day before announcement of the Fundraising). The
Placing Shares and Broker Option Shares are expected to be issued on Admission
on 7 July 2022. Furthermore, the Company will issue and additional 125,000 Fee
Shares on Admission at the Issue Price in lieu of liabilities of the Company
amounting to £12,500.
Shareholders should note that the issue of the Broker Option Shares is
conditional upon the passing of certain resolutions at the Company's upcoming
Annual General Meeting ("AGM") in relation to renewal of share issuance
authorities. Should these resolutions not be passed at the AGM, the Company
will not receive any funds raised from the Broker Option, which would limit
the amount of working capital available to it.
Background to and Reasons for the Fundraising
ValiRx is an AIM quoted life sciences company focused on early-stage cancer
therapeutics and women's health. The Company seeks to identify the most
promising research in academia and innovative biotechnology companies and
translate this research towards clinical development, providing a pathway to
commercialisation.
Through the provision of expertise in drug development, ValiRx currently
offers its collaborators an efficient and effective process to prepare novel
compounds for clinical trials thereby de-risking the process of translation.
The Company has two promising clinical-stage therapeutics currently undergoing
out-licensing and three pre-clinical assets under evaluation as potential
in-licensing candidates, with applications across breast cancer,
endometriosis, adenocarcinoma and prostate cancer. The Company provided an
operational update to the market regarding each of these therapeutic
programmes on 15 March 2022.
The Directors believe that there are fundamental issues impacting drug
development today, particularly within the pre-clinical phase, in terms of
innovation, productivity and access. A lack of expertise in early-stage drug
developers, particularly in academia, contributes to low rates of success in
translating novel scientific research into valuable new therapeutic assets,
hindering both the adoption of innovation and the overall productivity of
developing new treatments.
For example, an academic specialising in molecular biology will be
well-positioned to discover a novel drug candidate, and may then seek to
present their early proof-of-concept studies to a major pharmaceutical
company. While the pharmaceutical company may have significant interest in the
technology, in order to take the molecule to the next stage of development it
would most likely require an extensive set of experimental data from the
researcher, including detailed data around drug absorption, pharmacokinetics
(impact of the body on the drug), pharmacodynamics (impact of the drug on the
body), routes of administration, distribution into various tissues, chemical
stability and chemical synthesis. In many instances, the researcher is not
only unlikely to have the knowledge, resources or technical expertise to
provide the necessary data to the pharmaceutical company, but is unlikely to
be aware of the criteria list in the first place.
This disconnect between academia and industry can ultimately prevent the
candidate molecule from being progressed further in development and ultimately
into an effective treatment for patients. An article in Nature titled
"Mitigating risk in academic preclinical drug discovery" states that "even
with the best risk management, >95% of these projects will fail".
Historically, there has been a high rate of failure in later stage clinical
trials for new therapies, leading to abortive costs and low productivity.
The Directors of ValiRx believe that more effective and complete preclinical
data to improve knowledge of the biology of a new treatment could reduce risk
and improve productivity in the process of translation into clinical trials.
Given the finite life of the patent for a new drug, the ability to get to
market more efficiently with reduced timelines can add significant value to
drugs which are ultimately approved for patient treatment and commercialised.
Each extra day of sales for a patent protected, block-buster drug, with sales
over a billion dollars a year, illustrates the enormous benefit of effective
translation. Furthermore, failure to consider relevant patient populations at
early stages in development can create issues of patient inclusion into
clinical trials and ultimate access to new treatments. For example, the
majority of early-stage clinical trials are conducted in men, resulting in
drugs and dosing schedules being optimised for this patient population. When
women are included in the final stage of clinical trials, they may reveal
different responses to the drug candidate, causing a late-stage trial failure,
or a delay in market authorisation while the gender differences are understood
and resolved.
ValiRx believes that a market opportunity exists for a new type of service
company that can address the fundamental issues detailed above and improve the
translation of novel science into clinically and commercially successful
products.
Following a change in management implemented in 2020, the Company's strategy
has transitioned from high-risk, high-cost clinical trial work previously
undertaken, and evolved to focus on translational services within the
pre-clinical phase. Through its experience of being the customer of
out-sourced services, the Company has identified the market in pre-clinical
testing to be fragmented and inefficient, and lacking in the ability to
generate and consolidate the necessary data for improved biological
understanding of new drugs. Therefore, the Company believes a highly
attractive opportunity exists to consolidate the market for preclinical
services and establish ValiRx as a specialised provider. By employing the
power of advanced data generation, bio-analytics and interpretation, ValiRx
seeks to integrate the currently fragmented niche service offerings. In
contrast to conventional contract research organisations' (CROs) businesses,
whose services are typically limited to providing standard laboratory testing
facilities and data generation, ValiRx seeks to offer, through its
consolidation strategy, a more comprehensive service package to its clients,
not only providing core laboratory testing, but also offering advanced data
collation, curation and analysis.
Currently operating as a fully virtual biotech company, ValiRx out-sources all
testing of current evaluation and pre-clinical projects to a wide range of
external CROs. As previously announced, the Company is of the view that this
fragmented approach to early-stage drug development is non-optimal and has
been assessing options to acquire capabilities and infrastructure to create a
more efficient and effective translational drug development service.
Through acquiring and integrating new CRO operations in-house, ValiRx can
create efficiencies and expand its capabilities, not only advancing its
existing projects but also enabling a wider range of pre-clinical testing
services to be offered to third parties. The revenue generated from providing
such services should enable continued investment in advanced testing and
analysis and support the progression of ValiRx in-house pipeline projects.
In pursuit of the strategy detailed above, the Company has been evaluating
attractive acquisition targets and is in varying stages of discussion with
potential CRO targets. Whilst the principal use of proceeds from this
Fundraising are to provide ongoing working capital for the Company's existing
business, the Directors believe that the improved balance sheet following the
Fundraising will facilitate the Company's ability to acquire its first revenue
generating CRO business, the first major milestone of becoming an acquisitive
tCRO.
Use of Proceeds
The Group has conditionally raised £1.5 million (before expenses) through the
Placing and may raise (subject to take up) up to an additional £1.0 million
(before expenses) under the Broker Option. The proceeds of the Fundraising, of
up to £2.5 million, are intended to be used by the Group to provide working
capital to continue development of its assets, as well as strengthen its
balance sheet with a view to pursuing its acquisitive tCRO strategy.
Details of the Placing
The Group has conditionally raised £1.5 million (before expenses) through the
Placing.
The Placing Shares have been conditionally placed with new and existing
investors. Neither the Placing nor the Broker Option Shares are being
underwritten. The New Ordinary Shares will, when issued, rank pari passu in
all respects with the Existing Shares. Application will be made for the New
Ordinary Shares to be admitted to trading on AIM. It is expected that
Admission will take place, and dealings in the Placing Shares and Broker
Option Shares and Fee Shares will commence on 7 July 2022.
The Placing is conditional, inter alia, on:
· the Placing Agreement becoming unconditional in all relevant respects
and not having been terminated in accordance with its terms prior to
Admission; and
· Admission becoming effective by no later than 8.00 a.m. on 7 July
2022 or such other date (being not later than 8.00 a.m. on 21 July 2022) as
Cenkos, Cairn and the Company may agree.
Shareholders should note that the issue of the Broker Option Shares is
conditional upon the passing of certain resolutions at the Company's upcoming
Annual General Meeting ("AGM") in relation to renewal of share issuance
authorities. Should these resolutions not be passed at the AGM, the Company
will not receive any funds raised from the Broker Option, which would limit
the amount of working capital available to it.
Details of the Broker Option
To provide shareholders and other investors who did not have the opportunity
to participate in the Placing, the Company has granted an option (the "Broker
Option") to Turner Pope Investments, subject to the completion of the
Fundraise, to invite subscriptions for up to an additional 10,000,000 new
Ordinary Shares (the "Broker Option Shares") at the Issue Price. The Broker
Option is exercisable any time before 8.00 a.m. on 4 July 2022. As far as is
practical, participation in the Broker Option will be prioritised for
shareholders (direct or indirect) on the register at the close of business on
29 June 2022 ("Existing Shareholders"). If the Broker Option is fully taken
up, it will raise an additional £1.0 million. A further announcement will be
made once the Broker Option Shares have been fully subscribed and the Broker
Options declared closed. If the Broker Option is not fully subscribed by 8.00
a.m. on 4 July 2022, orders from eligible investors will be satisfied in full,
and the balance of the Broker Option shall lapse. Further details regarding
participation, the eligibility criteria, the order of priority, and details
regarding settlement, are set out in more detail below.
Broker Option
The Broker Option has been granted primarily to facilitate the participation
by existing shareholders of the Company. Non-shareholders of the Company can
also participate in the event existing shareholders do not apply for the
shares in full.
Independent financial advisers, stockbrokers or other firms authorised by the
Financial Conduct Authority may apply to participate in the Broker Option, on
behalf of existing shareholders and other interested applicants. As Turner
Pope Investments cannot take direct orders from individual private investors,
independent financial advisers, stockbrokers, or other firms authorised by the
Financial Conduct Authority, should communicate their interest to Turner Pope
Investments. Parties who wish to register their interest in participating in
the Broker Option should contact Turner Pope ( info@turnerpope.com ) on +44
(0)20 3657 0050. Each application should state the number of Broker Option
Shares that the interested party wishes to acquire at the Issue Price and
should be submitted to Turner Pope no later than 8.00 a.m. on 4 July 2022.
As far as is practical, participation in the Broker Option will be prioritised
for shareholders on the Company's share register at the close of business on
29 June 2022 ("Existing Shareholders"). Turner Pope may choose not to accept
applications and/or to accept applications, either in whole or in part, on the
basis of allocations determined at their sole discretion (after consultation
with the Company) and may scale down any bids for this purpose on such basis
as Turner Pope may determine. If the Broker Option is not fully subscribed by
1200 BST on 4 July 2022 orders from eligible investors will be satisfied in
full, and the balance of the Broker Option shall lapse.
It is expected that, following allocations by Turner Pope (in consultation
with the Company), application will be made to the London Stock Exchange for
the relevant amount of Broker Option Shares to be admitted to trading on AIM
("Admission"). Admission is expected to become effective and trading of the
Broker Option Shares will commence at 8.00 a.m. on 7 July 2022. Following
Admission, such Broker Option Shares will rank pari-passu with the existing
Ordinary Shares.
Directors' Intention to Participate
The Directors of the Company have confirmed their intention to subscribe
through the Fundraise an amount of £32,500 in aggregate. A further
announcement will be made in due course confirming the Directors'
participations.
FUNDRAISING STATISTICS
Number of Existing Shares 65,049,156
Number of Placing Shares 15,000,000
Number of Fee Shares 125,000
Maximum number of Broker Option Shares((1)) 10,000,000
Issue Price 10 p per share
Number of Ordinary Shares in issue following Admission((1)) 90,174,156
Percentage of the Enlarged Share Capital represented by the Placing 16.63%
Shares((1))
Percentage of the Enlarged Share Capital represented by the New Ordinary 27.86%
Shares((1))
Gross proceeds of the Placing £1,500,000
Maximum gross proceeds of the Broker Option((1)) £1,000,000
Gross proceeds of the Fundraising((1)) £2,500,000
Ordinary Share ISIN GB00BLH13C52
(1) Assuming the Broker Option Shares are subscribed for in full and
authority is granted at the Annual General Meeting to issue such shares
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2022
Announcement of the Fundraising 30 June
Latest time and date for applications under the Broker Option (if not closed 12.00 BST on 4 July
beforehand)
Admission and dealings in the Placing Shares and Broker Option Shares and Fee 8.00 a.m. on 7 July
Shares expected to commence on AIM
Expected date for CREST accounts to be credited for Placing Shares and Broker 8.00 a.m. on 7 July
Option Shares and Fee Shares to be held in uncertified form
Despatch of definitive share certificates in respect of the New Ordinary by 21 July
Shares to be held in certificated form, if applicable
Notes:
1. Each of the times and dates above are indicative only and if any of the
details contained in the timetable above should change, the revised times and
dates will be notified to Shareholders by means of an announcement through a
Regulatory Information Service.
2. All of the above times refer to London time unless otherwise stated.
3. All events listed in the above timetable related to the Broker Option are
conditional on the passing at the Annual General Meeting of the Resolutions to
provide the relevant authorities.
DEFINITIONS
The following words and expressions shall have the following meanings in this
Announcement unless the context otherwise requires:
"Admission" admission of the Placing Shares and Broker Option Shares and Fee Shares to
trading on AIM becoming effective in accordance with the AIM Rules which is
expected to occur at 8.00 a.m. on 7 July 2022
"AIM" AIM, the market of that name operated by the London Stock Exchange
"AIM Rules" the AIM Rules for Companies published by the London Stock Exchange from time
to time
"Business Day" any day other than a Saturday, Sunday or public holiday in England and Wales
on which clearing banks in London are open for general banking business
"Broker Option" the option to allow subscriptions by new and existing investors of up to £1.0
million at the Issue Price
"Broker Option Shares" up to 10,000,000 new Shares being made available to investors pursuant to the
Broker Option
"Cairn" Cairn Financial Advisers LLP
"Cenkos" Cenkos Securities plc
"certificated" or not in uncertificated form
"in certificated form"
"City Code" the City Code on Takeovers and Mergers issued by the Panel on Takeovers and
Mergers in the UK
"Company" or "ValiRx" ValiRx PLC
"CREST" the facilities and procedures for the time being of the relevant system of
which Euroclear has been approved as operator pursuant to the CREST
Regulations
"Directors" or "Board" the directors of the Company, or any duly authorised committee thereof
"Enlarged Share Capital" the issued ordinary share capital of the Company immediately following
Admission
"Existing Shares" the 65,049,156 Shares in issue as at the date of this Announcement
"FCA" Financial Conduct Authority
"Fee Shares" the 125,000 new Shares to be issued by the Company at the Issue Price at
Admission
"Fundraising" the Placing and the Broker Option
"Group" the Company and its subsidiary undertakings from time to time
"Issue Price" 10 pence per New Share
"Neville Registrars" or "Receiving Agent" the trading name of Neville Registrars Limited
"London Stock Exchange" London Stock Exchange plc
"New Ordinary Shares" the Placing Shares and the Broker Option Shares and the Fee Shares
"Placing" the placing of the Placing Shares at the Issue Price pursuant to the Placing
Agreement
"Placing Agreement" the conditional placing agreement dated 30 June 2022 and made between the
Company and Cenkos in relation to the Fundraising
"Placing Shares" the 15,000,000 new Shares to be issued by the Company at the Issue Price at
Admission
"Qualifying CREST Shareholders" Qualifying Shareholders holding Existing Shares in uncertificated form on the
Register on the Record Date
"Qualifying Non-CREST Shareholders" Qualifying Shareholders holding Existing Shares in certificated form on the
Register on the Record Date
"Qualifying Shareholders" holders of Existing Shares on the register of members of the Company at the
Ex-entitlement Date that are not Restricted Shareholders
"Register" the register of members of the Company
"Regulatory Information Service" a regulatory information service approved by the FCA and on the list of
regulatory information services maintained by the FCA
"Shareholders" holders of Shares
"Shares" ordinary shares of 0.1 pence each in the capital of the Company
"uncertificated form" or recorded in the Register as being held in uncertificated form in CREST and
"in uncertificated form" title to which, by virtue of the CREST Regulations, may be transferred by
means of CREST
"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland
"United States" or "US" the United States of America, its jurisdictions and possession, any state of
the United States and the District of Columbia
"US Dollar" the lawful currency of the United States
"US Securities Act" the U.S. Securities Act of 1933, as amended
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