REG - Vela Technologies - Option for potential sale of interest in AZD1656

Vela TechnologiesAnnouncement

20/04/2023 15:15

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230420:nRST9552Wa&default-theme=true

RNS Number : 9552W  Vela Technologies PLC  20 April 2023

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (596/2014/EU) as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018.

20 April 2023

Vela Technologies plc

("Vela" or "the Company")

 

Put Option for potential sale of Economic Interest in AZD1656

The Board of Vela (AIM: VELA), an AIM-quoted investing company focused on
early-stage and pre-IPO disruptive technology investments, is pleased to
announce that the Company has today entered into a put option agreement ("the
Option Agreement") to give the Company the right, but not the obligation ("the
Option"), to sell its economic interest in the commercialisation of the
Covid-19 application of AZD1656 for a total consideration of £4.0 million.
The Option is being granted by Conduit Pharmaceuticals Limited ("Conduit") and
its prospective parent company, Murphy Canyon Acquisition Corp ("Murphy"), a
Company listed on NASDAQ. Should the Option be exercised by Vela the
consideration that would be payable to Vela will be satisfied through the
issuance of new shares of authorised common stock of par value $0.001 of
Murphy ("the Consideration Shares"). The Option is exercisable solely at the
discretion of Vela and Vela will pay Conduit £400,000 in cash as the premium
for the Option, with the consideration to be settled shortly from Vela's
existing cash resources.

 

The Option is exercisable in whole at any time from the completion of
Conduit's proposed merger with Murphy ("the Merger") until the earlier of the
date that is six months from the Merger and 7 February 2024. The Option may be
exercised only if the Merger concludes and the new shares in Murphy issued as
a consequence of the Merger are listed and publicly traded on the NASDAQ stock
exchange in the United States. Should Vela exercise the Option, the Company
will hold shares in Murphy (to be re-named Conduit Pharmaceuticals Inc.) as a
publicly traded company on NASDAQ.

Vela entering into the Option does not change the book value of the Economic
Interest (as defined below) which remains held at £2.35 million in line with
the Company's most recent published unaudited interim results as at 30
September 2022.

On 20 October 2020, Vela acquired an 8 per cent. economic interest in the
commercialisation of the Covid-19 application of AZD1656 from St George Street
Capital ("SGSC"), a UK-based medical charity. Under the terms of the
agreement, SGSC agreed to pay Vela 8 per cent. of any proceeds received by
SGSC in excess of £19.2 million and after the deduction of sums payable to
the original major pharmaceutical company developer and to certain other
funders and after provision for taxation ("the Economic Interest").
Consideration for the acquisition of the Economic Interest was £2.35 million,
satisfied by cash of £1.25 million and the issuance of 1,100,000,000
consideration shares in Vela at a price of 0.1 pence per share. SGSC is a
party to, and has consented to, the Option Agreement.

Conduit announced on 9 November 2022 that it is being acquired by Murphy for a
total consideration of US$650 million. Completion of this business combination
transaction is expected to occur in 2023. A copy of Murphy's announcement can
be found at:

Conduit Pharmaceuticals to Become a Publicly Traded Company via Merger with
Murphy Canyon Acquisition Corp. (accesswire.com)
(https://www.accesswire.com/724601/Conduit-Pharmaceuticals-to-Become-a-Publicly-Traded-Company-via-Merger-with-Murphy-Canyon-Acquisition-Corp)

 

It is estimated that in the event that the Option is exercised, the
Consideration Shares will represent approximately 0.66% of the enlarged share
capital of Murphy (assuming no redemptions in Murphy). It is the intention of
Vela, subject to the necessary regulatory requirements of NASDAQ, then to sell
the Consideration Shares in order to augment its cash reserves. The
Consideration Shares will not be subject to any lock-in restrictions.

 

The Board of Vela is mindful that there can be no guarantee that Vela will be
able to exercise the Option, since exercise is dependent on the successful
completion of the Merger and the combined entity being listed on the NASDAQ
stock exchange.

 

James Normand, Executive Director of Vela, commented: "Vela is pleased to have
gained, through this transaction with Conduit Pharmaceuticals, the potential
to convert an illiquid asset into shares in a publicly listed vehicle. Should
the merger between Conduit and Murphy conclude and the Option be exercised,
Vela will then be in a position to monetise its investment in SGSC, following
which it would intend to redeploy such cash proceeds in accordance with its
investing policy."

 

For further information, please contact:

 Vela Technologies plc                                    Tel: +44 (0) 7410 886830

 Brent Fitzpatrick, Non-Executive Chairman

 James Normand, Executive Director
 Allenby Capital Limited (Nominated Adviser)              Tel: +44 (0) 20 3328 5656
 Nick Athanas / Piers Shimwell
 Peterhouse Capital Limited (Broker)                      Tel: +44 (0) 20 7469 0930
 Lucy Williams / Duncan Vasey / Eran Zucker / Oryon Lass
 Novus Communications (PR and IR Adviser)                 Tel: +44 (0) 20 7448 9839
 Alan Green / Jacqueline Briscoe

 

About Vela Technologies

Vela Technologies plc (AIM: VELA) is an investing company focused on early
stage and pre-IPO long term disruptive technology investments.  Vela's
investee companies have either developed ways of utilising technology or are
developing technology with a view to disrupting the businesses or sector in
which they operate. Vela Technologies will also invest in already-listed
companies where valuations offer additional opportunities.

About Conduit Pharmaceuticals Limited

Led by highly experienced pharma executives, Conduit is a clinical stage
specialty biopharmaceutical company, addressing unmet medical needs in the
areas of autoimmune disease and idiopathic male infertility. The development
pipeline includes a glucokinase inhibitor in a number of Phase 2 ready
autoimmune diseases including uveitis, Hashimoto's Thyroiditis, pre-term
labour and renal transplant. Conduit's development pipeline also includes a
potent, irreversible inhibitor of human Myeloperoxidase (MPO) that has the
potential to treat idiopathic male infertility.

 

For the year ended 31 December 2021 Conduit had no revenue and incurred a net
loss of $3.66m. As at 31 December 2021 Conduit's net liabilities totalled
$5.94m.

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

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