MEDG Medgenics(Regs)

 

TIDMMEDG 
 
RNS Number : 3293T 
Medgenics Inc 
27 September 2010 
 

                                Medgenics, Inc. 
                         ("Medgenics" or the "Company") 
 
    Medgenics Announces Successful closing of $4m Convertible Debenture Issue 
 
27 September 2010 - Misgav, Israel and London, UK -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 pleased to announce that it has successfully raised additional funds 
to finance further advances with its Phase I/II clinical trial of 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 private placement of $4 million of new convertible 
debentures. This fund raise was in excess of the original $3 million the Company 
had targeted and, the Directors believe, indicates support from both new and 
existing investors in the continued development of the Company. 
 
The Company received confirmation on 24 September 2010 that the Kanter Family 
Foundation* and CIBC Trust Company (Bahamas) Limited, as trustee**, each 
purchased $100,000 of debentures and each received warrants to purchase 375,000 
common shares of US $0.0001 each in the capital of the Company ("Common 
Shares").  In addition, Chicago Investments, Inc.*** purchased $50,000 of 
debentures and received warrants to purchase 187,500 Common Shares. These three 
entities are "Related Parties" of Joel Kanter (a Director of the Company) for 
the purpose of the AIM Rules. 
 
 
Andrew Pearlman, CEO, commented: 
 
"The closing of this round with greater demand than we had anticipated clearly 
indicates there is great support for the Company's ongoing development plans. 
The proceeds will allow us to move forwards with the ongoing Phase I/II trial 
for EPODURE, initiate work on the INFRADURE clinical trials and to further our 
progress with other applications of our biopump platform technology while 
maintaining dialogue with potential partners for new protein applications and 
moving forward with possible commercialization deals. We are at a very exciting 
stage of the Company's development and we thank new and existing investors for 
their continued support" 
 
The new convertible debentures are unsecured obligations of the Company, accrue 
interest at 4% per annum and mature and become repayable 12 months from the date 
of issuance.  Holders of such debentures may convert them anytime into Common 
Shares, at an initial conversion price of 13p per Common Share.  The debentures 
will automatically convert upon an underwritten public offering of Common Shares 
raising at least $6 million and resulting in the Common Shares 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 per Common Share and 
75% of the public offering price of the Common Shares in such underwritten 
public offering.  Purchasers of these new convertible debentures received 
warrants to purchase a number of Common Shares equal to 75% of the number of 
Common Shares into which the debentures could convert on the date of issuance. 
Such warrants are immediately exercisable, have a 5 year term and have an 
initial 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 
Shares 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. 
 
Notes: 
* The Kanter Family Foundation, an Illinois not-for-profit corporation of which 
Mr. Joel Kanter, a non-executive director of Medgenics, is the President and is 
a Director. 
** CIBC Trust Company (Bahamas) Limited ("CIBC") is the trustee of a trust 
("CIBC Trust") established for the benefit of various descendants of (i) Helen 
and Henry Krakow, and (ii) Beatrice and Morris Kanter.  Mr. Kanter is a 
discretionary beneficiary of the CIBC Trust.  Sole voting and investment control 
of shares owned by the CIBC Trust is vested in CIBC as trustee of the CIBC 
Trust. 
*** Chicago Investments, Inc. ("CII"). CII is a majority-owned subsidiary of 
Chicago Holdings, Inc. ("CHI"). CHI is majority owned by various trusts 
(together the "Kanter Trusts") established for the benefit of various 
descendants of (i) Helen and Henry Krakow, and (ii) Beatrice and Morris Kanter. 
Joel Kanter is a discretionary beneficiary of some, but not all, of the Kanter 
Trusts. Sole voting and investment control of the Common Shares owned by CII is 
vested in Mr. Kanter's brother, Joshua Kanter, as President of CII. 
For the purposes of applicable US Securities Laws and regulations, Mr. Kanter 
disclaims all beneficial and pecuniary interest to the Common Shares held by CII 
and CHI and the CIBC Trust. Such disclaimer does not affect Mr. Kanter's status 
as a discretionary beneficiary under the Kanter Trusts or the CIBC Trust. 
 
 
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)                                 |                          | 
| Jon Senior                              |                          | 
+-----------------------------------------+--------------------------+ 
 
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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