TIDMIMM
RNS Number : 1210W
Immupharma PLC
20 December 2021
20 December 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014
WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL)
ACT 2018, AS AMED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A
REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO
BE IN THE PUBLIC DOMAIN. IN ADDITION, MARKET SOUNDINGS WERE TAKEN
IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE
RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE
INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE
INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH
PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE
INFORMATION.
ImmuPharma PLC
("ImmuPharma" or the "Company")
Subscriptions and Placing to raise GBP3.55 million; Sharing
Agreement;
to fund Investment in R&D pipeline
Company's Partner Alora and two longstanding investors including
Lanstead to participate at an
Issue price of 11p - 80% premium to current share price
ImmuPharma PLC (LSE AIM: IMM), the specialist drug discovery and
development company, is pleased to announce subscriptions and a
placing to raise GBP3.55 million (the "Subscription(s)" and
"Placing") through the issue of 32,272,727 new ordinary shares of
10 pence each in the Company ("Ordinary Shares") at a price of 11
pence per Ordinary Share ("Issue Price") utilising the maximum
amount of existing authorities to allot shares. The Company has
also entered into a sharing agreement ("Sharing Agreement") with
Lanstead Capital Investors L.P. ("Lanstead|").
Highlights
-- Subscription for 10,909,091 new Ordinary Shares ("the Alora
Subscription Shares") by Alora Pharmaceuticals LLC ("Alora"), the
parent company of Avion Pharmaceuticals LLC ("Avion"), with whom
the Company signed a licence and development agreement in November
2019 for the exclusive rights to Lupuzor(TM) in North America
(United States), to raise GBP1.2 million (the "Alora
Subscription").
-- Subscription for 20,000,000 new Ordinary Shares (the
"Lanstead Subscription Shares") by Lanstead at an issue price of 11
pence per Subscription Share to raise GBP2.2 million (the "Lanstead
Subscription").
-- Placing of 1,363,636 new Ordinary Shares ("Placing Shares")
to raise GBP0.15 million (the "Placing").
-- The Issue Price represents a 80 per cent. premium to the
closing mid-market price (of 6.1p) of the Ordinary Shares on 17
December 2021, the latest business date prior to the Subscriptions
and Placing.
-- The GBP2.2 million gross proceeds of the Lanstead
Subscription will be pledged by the Company pursuant to a 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 24 months,
subject to adjustment upwards or downwards each month depending on
the Company's share price at the time. The monthly settlement
amounts for the Sharing Agreement are structured to commence
approximately two months (or earlier by agreement with Lanstead)
following Admission. The Sharing Agreement provides the opportunity
for the Company to benefit from positive future share price
performance.
-- The Company has also agreed to issue to each of the
Subscribers and Placees warrants (on the basis of 2 warrants for
each 1 Subscription Share and Placing Share subscribed). The
warrants are exercisable for 10 years at an exercise price of 11
pence, a 80 per cent. premium to the closing mid-market price (of
6.1p) of the Ordinary Shares on 17 December 2021. In total
64,545,454 warrants will be issued under the Subscriptions and
Placing.
-- The proceeds of the Subscriptions, Placing and Sharing
Agreement, will be used primarily to fund:
-- Investment into the Company's R&D pipeline;
-- General working capital; and
-- Cash expenses associated with the Subscriptions, Placing and Sharing Agreement of c.GBP189k.
Commenting on the fundraising, Tim McCarthy, CEO of ImmuPharma
said:
"Our corporate repositioning since the Board changes in August
continues at a pace. These have been recognised by our long term
shareholder Lanstead, a firm supporter of ImmuPharma since 2016. We
are also delighted that our partner, Alora Pharmaceuticals has also
recognised the shift in the Company's investment and corporate
proposition, supporting this fundraising at a significant premium
to our current share price, together with Lanstead and another
longstanding institutional investor. We as a team, remain committed
to reaching key milestones over the next period. This includes
taking our lead product, Lupuzor(TM) into its pivotal Phase 3 study
in 2022, progressing our further late stage asset, CIDP, where we
are now gaining interest from potential partners to expedite this
program and also our earlier stage assets including BioAMB, within
our anti-infective portfolio. We look forward to sharing further
value enhancing newsflow over the next period."
Dr Tim Franklin, COO of ImmuPharma, added:
"Our partnership with Alora, a dynamic and fast-growing US
company, continues to strengthen and their investment into this
Subscription provides a new and exciting turning point for
ImmuPharma. Operationally we can now unlock the value of our rich
product portfolio. We are excited to be working ever more closely
with Alora's team as we move Lupuzor(TM) forward towards its Phase
3 clinical trial. Overall, our focus remains on bringing our two
late-stage clinical assets, Lupuzor(TM), and CIDP, closer to the
market whilst progressing our earlier stage assets."
Art Deas, CEO of Alora and Avion, further commented:
"We met with ImmuPharma's new management team very recently and
were presented with the corporate re-positioning story, since the
new Board was established in August. Our previous decision to
support the Lupus study and our current decision to invest directly
in ImmuPharma, is based on our view that its portfolio has a number
of value rich assets which we believe have significant commercial
potential. Our commitment to further develop Lupuzor(TM) remains
our key focus. We are however, also very excited about the
potential of the other programs in ImmuPharma's portfolio."
Summary background to Avion Pharmaceutical's licensing agreement
with ImmuPharma
As previously announced on 28 November 2019, ImmuPharma and
Avion signed an exclusive licence and development agreement and
trademark agreement for Lupuzor(TM) to continue developing
Lupuzor(TM) and commercialise the product in the US. ImmuPharma
will receive milestone payments of up to $70 million. A $5 million
milestone payment will be paid on regulatory approval of
Lupuzor(TM) in lupus, and $65 million will be based on achievement
of overall sales targets. ImmuPharma will also receive tiered
double-digit royalties up to 17 percent according to pre-specified
annual US sales targets. Avion will also have the right to explore
clinical development for other auto-immune indications within US
territories. Additional milestone payments of $5 million will be
paid to ImmuPharma for each disease indication, outside of lupus,
receiving regulatory approval.
Further information on the Alora Subscription and Placing
Alora Subscription
Following a meeting in the US in December between the new
management team of ImmuPharma and Art Deas, Alora's Founder &
CEO, Alora confirmed that it would like to participate in this
Subscription. This investment into ImmuPharma is based on the
potential upside and future value creation of the key assets in
ImmuPharma's portfolio (including Lupuzor(TM)).
Alora is subscribing for 10,909,091 Subscription Shares to raise
GBP1.2 million. In addition, Alora will receive 21,818,182
warrants.
The Alora Subscription is conditional, inter alia, on
Admission.
The Alora 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.
Placing
In parallel, a further longstanding institutional shareholder in
ImmuPharma was approached to gauge their interest in participating
in the current funding round based on the current valuation and
potential upside of the business over the next period. They too
indicated their agreement in participating alongside Alora and
Lanstead.
In connection with the Placing, the Company has today entered
into the Placing Agreement ("Placing Agreement") pursuant to which
Stanford Capital Partners Limited ("SCP") has agreed, in accordance
with its terms, to use reasonable endeavours to procure subscribers
for the Placing Shares. The Placing is not underwritten.
The Placing Agreement contains certain customary warranties
given by the Company concerning the accuracy of information given
in this announcement in respect of the Placing as well as other
matters relating to the Group and its business. The Placing
Agreement is terminable by SCP and SPARK Advisory Partners Limited
("SPARK") in certain customary circumstances up until the time of
Admission, including, inter alia, should there be a breach of a
warranty contained in the Placing Agreement which in the opinion of
SPARK and SCP is material in the context of the Placing or a force
majeure event takes place. The Company has also agreed to indemnify
SCP and SPARK against all losses, costs, charges and expenses which
SCP and SPARK may suffer or incur as a result of, occasioned by or
attributable to the carrying out of its duties under the Placing
Agreement.
1,363,636 Placing Shares will be issued to raise GBP150,000. In
addition, the placee will receive 2,727,272 warrants.
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
to AIM becoming effective and the Placing Agreement not being
terminated in accordance with its terms.
Further information on the Lanstead Subscription
Pursuant to the subscription agreement between the Company and
Lanstead (the "Lanstead Subscription Agreement"), 20,000,000 new
Ordinary Shares have today been allotted and will be issued to
Lanstead at 11 pence per Lanstead Subscription Share for an
aggregate subscription value of GBP2.2 million.
The Lanstead Subscription proceeds of GBP2.2 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 that Sharing Agreement, monthly
settlements (subject to adjustment upwards or downwards) to the
Company over 24 months, 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 GBP2.2 million, as further explained
below. Notwithstanding the Subscription Price of 11 pence,
shareholders should note that the share price of the Company needs
to be on average over the 24 months of the Sharing Agreement at or
above the Benchmark Price of 14.6667 pence per share for the
Company to receive at least, or more than, the gross Subscription
of GBP2.2 million.
The Lanstead 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.
Application has been made to the London Stock Exchange for
admission of the Lanstead Subscription Shares to trading on AIM
("Admission"). The Lanstead Subscription is conditional, inter alia
, on Admission and there being: (i) no breach of certain customary
warranties given by the Company to Lanstead at any time prior to
Admission; 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 GBP2.2 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 24
equal monthly settlement amounts (of GBP 91,667) as measured
against a benchmark share price of 14.6667 pence per Ordinary Share
(the "Benchmark Price"). The monthly settlement amounts for the
Sharing Agreement are structured to commence approximately three
months (or earlier by agreement with Lanstead) following
Admission.
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 24 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 GBP2.2 million (before expenses) from the
Lanstead Subscription and Sharing Agreement. 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 incurred in the
Lanstead Subscription and in entering into the Sharing Agreement
and, in addition, has agreed to issue to Lanstead 1,400,000 new
Ordinary Shares ("Value Payment Shares") in connection with
entering into the Sharing Agreement, together with w arrants over
40 million Ordinary Shares with an exercise price of 11 pence per
share. These warrants have an exercise period expiring on the tenth
anniversary of Admission.
In no event will fluctuations in the Company's share price
result in any increase in the number of Lanstead 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 20,000,000 new Ordinary
Shares pursuant to the Lanstead Subscription which, when issued,
will equate (together with the Value Payment Shares) to
approximately 7.5 per cent of the Company's enlarged issued share
capital following the Placing and the Subscriptions.
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 to those undertaken by the
Company with Lanstead in February 2016, June 2019 and March 2020.
The first two of these arrangements have completed their settlement
periods. The February 2016 agreement yielded a net gain to
ImmuPharma of approximately GBP0.6 million more than originally
subscribed by Lanstead and the June 2019 agreement yielded
approximately GBP0.9 million less than originally subscribed by
Lanstead. The third arrangement runs to June 2022 and is currently
yielding approximately GBP0.6 million less than the pro rata amount
originally subscribed by Lanstead on cumulative settlements to
date.
The Directors believe that the Sharing Agreement provides a
number of benefits to the Company and its shareholders including:
the certainty of additional investment, albeit the quantum 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.
Related Party Transactions
Lanstead is a shareholder in the Company, and is interested in
14,182,329 Ordinary Shares (representing 5.67% of the current
issued share capital). Until 31 December 2020 Lanstead was a
substantial shareholder, therefore the participation by Lanstead in
the Lanstead Subscription and Sharing Agreement constitute related
party transactions under the AIM Rules for Companies.
Lanstead Subscription and Sharing Agreement
The Directors (all of whom are independent of Lanstead), having
consulted with SPARK, the Company's nominated adviser, consider
that the terms of the Lanstead Subscription and the Lanstead
Sharing Agreement are fair and reasonable insofar as the Company's
shareholders are concerned.
Other Share Issues
The Company has issued 90,909 and 1,000,000 new Ordinary Shares
(" Fee Shares ") at an issue price of 11 pence per share to SPARK
and SCP respectively, in lieu of fees. 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, and expected date
of Admission
Application has been made for the the Lanstead Subscription
Shares, the Alora 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 to AIM will occur at 8.00am on or around 23 December
2021.
Total Voting Rights
Following Admission, the Company's issued share capital will
comprise 284,984,933 Ordinary Shares with one voting right each. As
the Company does not hold any shares in Treasury, the total number
of voting rights in the Company is also 284,984,933 and this figure
of Ordinary Shares may be used by shareholders as the denominator
for the calculations by which they will determine if they are
required to notify their interest in, or a change to their interest
in, the share capital of the Company under the FCA's Disclosure
Guidance and Transparency Rules.
The allotment of the Lanstead Subscription Shares, the Alora
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 2021.
L1 and Lind Convertible Security Deeds
On 15 December 2021, ImmuPharma repaid in full the remaining
outstanding balance of $950,000 (plus accrued interest) due to L1
Capital Global Opportunities Master Fund ("L1") . The Company
confirms that both convertible security deeds with L1 and Lind
Global Macro Fund, LP ("Lind") have now been repaid in full and/or
converted.
About Lanstead
Lanstead is an institutional investor that since 2007 has
provided funding for ongoing business objectives to listed small
and mid-cap growth companies. Lanstead focuses on equity
investments in listed companies with 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 benefit from a unique and flexible
approach to finance growth. This provides the opportunity for
companies to benefit from additional cash beyond the original
placing proceeds without having to issue additional shares.
Further information is available at www.Lanstead.com
Appendix - example of Lanstead Sharing Agreement
In relation to each of the months in the 24 month calculation
period:
Average 20 Day VWAP 11.00p 14.6667p 18.3334p
Benchmark Price 14.6667p
14.6667p 14.6667p
as % of Benchmark Price 75%
100% 125%
Settlement from Lanstead in the month GBP68,750 GBP91,667
GBP114,583
Proceeds over 24 month period
If Average 20 Day VWAP is at this level
for the entire period GBP1.65m
GBP2.90m GBP2.752m
For further information please contact:
ImmuPharma PLC ( www.immupharma.com )
Tim McCarthy, Chief Executive Officer &
Chairman + 44 (0) 207 152 4080
Lisa Baderoon, Head of Investor Relations
& Non-Executive Director + 44 (0) 7721 413496
SPARK Advisory Partners Limited (NOMAD) +44 (0) 203 36 8 3550
Neil Baldwin
Stanford Capital Partners (Joint Broker) +44 20 3650 3650
Patrick Claridge
John Howes
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, metabolic diseases, anti-infectives and
cancer. The lead program, Lupuzor(TM), is a first-in class
autophagy immunomodulator which is in Phase 3 for the treatment of
lupus and preclinical analysis suggest therapeutic activity for
many other autoimmune diseases that share the same autophagy
mechanism of action. ImmuPharma and Alora Pharmaceuticals signed on
28 November 2019, an exclusive licence and development agreement
and trademark agreement for Lupuzor(TM) to fund a new international
Phase 3 trial for Lupuzor(TM) and commercialise in the US.
For additional information about ImmuPharma please visit
www.immupharma.co.uk
ImmuPharma's LEI (Legal Entity Identifier) code:
213800VZKGHXC7VUS895.
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