Successful closing of $4m Conv. Debenture Issue
September 27 2010 - 3:16AM
UK Regulatory
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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