MEDG Medgenics(Regs)

 

TIDMMEDG 
 
RNS Number : 4356R 
Medgenics Inc 
24 August 2010 
 

                                Medgenics, Inc. 
                         ("Medgenics" or the "Company") 
 
                    Proposed New Convertible Debenture Issue 
 
Misgav, Israel and London, UK - 24 August 2010 - Medgenics (AIM: MEDG and MEDU), 
the company that has developed a novel technology for the manufacture and 
delivery of therapeutic proteins continuously in patients using their own 
tissue, is seeking to raise additional funds to finance further advances with 
its Phase I/II clinical trial for its product EPODURE (for the treatment of 
anaemia) and to initiate steps towards the launch of a Phase I/II trial for its 
product INFRADURE (for the treatment of hepatitis-C), through the sale of $1-3 
million of new convertible debentures. 
 
The new convertible debentures will be unsecured obligations of the Company, 
will accrue interest at 4% per annum and will mature and become repayable 12 
months from the date of issuance.  Holders of such debentures may convert them 
anytime into shares of common stock, $0.0001 par value per share ("Common 
Stock"), at a conversion price of 13p.  The debentures will automatically 
convert upon an underwritten public offering of Common Stock raising at least $6 
million and resulting in the Common Stock being listed on a U.S. national 
securities exchange or automated quotation system (a "US Listing"), at a 
conversion price equal to the lesser of 13p and 75% of the public offering price 
of the Common Stock in such underwritten public offering.  Purchasers of these 
new convertible debentures will receive warrants to purchase a number of shares 
of Common Stock equal to 75% of the number of shares of Common Stock into which 
the debentures convert.  Such warrants will be immediately exercisable, have a 5 
year term and have an exercise price of 16p.   If a further issuance of 
securities is made by the Company at a lower price, both the conversion price of 
the debentures and the exercise price of the warrants will be subject to 
downward adjustment to such lower issue price and, if such issuance takes place 
prior to a US Listing occurring, the number of warrants held by each 
warrantholder will be increased to maintain the aggregate exercise price of his 
original warrants.  Any Common Stock issued upon conversion of the debentures 
and exercise of the warrants will be deemed restricted stock under U.S. 
securities laws and cannot be sold or transferred unless subsequently registered 
under such laws or an exemption from the registration requirements is available. 
 
No application will be made for the debentures or the warrants to be admitted to 
trading on the AIM market of the London Stock Exchange or any other stock 
exchange. 
 
This new series of convertible debentures will be offered and sold in a private 
placement transaction only (i) in the USA to "accredited investors" as such term 
is defined in Regulation D promulgated under the United States Securities Act of 
1933, as amended, who have already been contacted by the Company and (ii) in the 
UK to investment professionals and other persons to whom such an offer may 
lawfully be made under the Financial Services and Markets Act 2000 and 
associated regulations.  The Company expects the fundraising to close during the 
first two weeks of September and will make a further announcement upon such 
closing.  This announcement is being made for regulatory purposes and no offer 
or sale of securities is being made by, or should be construed as a result of, 
this announcement. 
For further information, contact: 
 
+-----------------------------------------+--------------------------+ 
| Medgenics, Inc.                         | Phone: +972 4 902 8900   | 
| Dr. Andrew L. Pearlman                  |                          | 
|                                         |                          | 
+-----------------------------------------+--------------------------+ 
| Religare Capital Markets (Nominated     | Phone: +44 207 444 0800  | 
| Adviser)                                |                          | 
| James Pinner                            |                          | 
| Derek Crowhurst                         |                          | 
|                                         |                          | 
+-----------------------------------------+--------------------------+ 
| SVS Securities plc (Joint Broker)       | Phone: +44 207 638 5600  | 
| Ian Callaway                            |                          | 
|                                         |                          | 
+-----------------------------------------+--------------------------+ 
| Nomura Code Securities PLC (Joint       | Phone: +44 207 776 1219  | 
| Broker)                                 |                          | 
+-----------------------------------------+--------------------------+ 
Notes to Editors: 
About Medgenics: 
 
Medgenics is a commercial-stage biopharmaceutical company developing its unique 
tissue-based Biopump platform technology to provide sustained-action protein 
therapy for the treatment of a range of chronic diseases. The first revenue 
generating commercial deal with a well known multinational pharmaceutical 
company was negotiated in late 2009 and we look forward to generating additional 
deals to further commercialise the Biopump platform technology. 
 
Biopumps are made using needle biopsies taken from the lower layer of the 
patient's skin under local anaesthetic, and processed during 10-14 days to 
become 30 mm long tissue biofactories producing the required protein.  The 
requisite number of Biopumps are injected under the patient's skin to provide 
sustained protein production and delivery for many months. The Company is 
developing the Biopump to provide substantially greater safety and reliability 
in protein treatment in a more cost effective manner than experienced with the 
existing injected protein therapies.  Medgenics currently has three products in 
development based on this technology and addressing the indications of: 
 
- anaemia - using EPODURE, a Biopump producing erythropoietin (EPO) 
 
- hepatitis-C - using INFRADURE - a Biopump producing interferon-alpha (IFN-a) 
 
- haemophilia - using a Biopump to produce clotting Factor VIII 
 
The Company's Phase I/II clinical trial using EPODURE to treat anaemia in 
patients with chronic kidney disease, has demonstrated proof of concept of the 
Biopump. Designed to produce and deliver a therapeutic dose of EPO steadily for 
six months or more, EPODURE Biopumps have already provided effective anaemia 
treatment in patients for 6-12 months, even at the low administered dose. 
 
Medgenics intends to develop its innovative products and bring them to market 
via multiple strategic partnerships with major pharmaceutical and/or medical 
device companies. In addition to treatments for anaemia, hepatitis-C, and 
haemophilia, Medgenics plans to develop and/or out-license a pipeline of future 
Biopump products targeting the large and rapidly growing global protein therapy 
market, which is forecast to reach US $95 billion by the end of 2010. Other 
potential applications of Biopumps producing various proteins include multiple 
sclerosis, arthritis, paediatric growth hormone deficiency, obesity, and 
diabetes. 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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