Verona Pharma PLC Admission of Placing Shares
July 29 2016 - 3:06AM
UK Regulatory
TIDMVRP
THIS ANNOUNCEMENT IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO OR FROM THE UNITED STATES,
AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER
JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE
UNLAWFUL. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT
CONSTITUTE AN OFFER OR AN INVITATION TO ACQUIRE OR DISPOSE OF ANY SECURITIES.
Verona Pharma plc
("Verona Pharma" or the "Company")
Admission of Placing Shares
Total Voting Rights
Directors' Holdings
Warrant Shares and Block Listing
29 July 2016, Cardiff - Further to the announcement of its proposed Placing on
17 June 2016 and the announcement of shareholder approval for the Placing at a
General Meeting (GM) held on 22 July 2016, Verona Pharma plc (AIM: VRP), the
drug development company focused on first-in-class medicines to treat
respiratory diseases, is pleased to confirm that, following admission to
trading of the Placing Shares on AIM with effect from 8.00 a.m. BST, the
Placing is now unconditional.
Highlights
* The Placing has secured funding to raise gross proceeds of GBP44.7 million
(approximately US$63.3 million at the exchange rate of 17 June 2016).
* The net proceeds of the Placing of approximately GBP41.9 million will be used
as follows:
+ predominantly to progress its lead candidate, RPL554, through a Phase
2b clinical trial in COPD patients;
+ to fund additional clinical Phase 2 studies in COPD and cystic
fibrosis;
+ to fund further supportive pre-clinical work, including the development
of a dry powder inhaler (DPI) or metered dose inhaler (MDI); and
+ for general working capital purposes.
* The Board anticipates that, with additional funds successfully obtained and
deployed as described above, RPL554 will continue to progress through what
are expected to be further significant value inflection points.
* The Board is now evaluating its drug development plans and looks forward to
providing the Company's enlarged shareholder base with further updates in
due course
Total Voting Rights
Pursuant to the oversubscribed Placing, the Company has issued 1,555,796,345
Units to new and existing investors at the Placing Price of 2.873 pence per
Unit. Each Unit comprises one Placing Share and one Warrant (with an
entitlement to subscribe for 0.4 of an Ordinary Share at a per share exercise
price of 120% of the Placing Price or 3.4476 pence).
Following Admission, the number of Ordinary Shares in issue and the number of
voting rights following Admission of the Placing Shares is 2,565,719,826. This
figure may be used by Shareholders as the denominator for the calculations by
which they will determine whether they are required to notify their interest
in, or a change to their interest in, the Company under the FCA's Disclosure
and Transparency Rules.
Directors' Holdings
As part of the Placing, Dr. David Ebsworth, Non-Executive Chairman of the
Company, purchased a further 614,455 Ordinary Shares via his purchase of the
same number of Units. Following Admission and Dr. Ebsworth's participation in
the Placing, the Company confirms that the Directors of the Company now hold
the following interests in the issued share capital of the Company:
Number of Percentage of
Ordinary Shares Enlarged Share Capital
Dr. Jan-Anders Karlsson 2,870,000 0.11%
(CEO)
Dr. David Ebsworth 5,214,227 0.20%
(Chairman)
Additional information relating to the Warrant Shares, the Company's Block
Listing and its prospective US IPO is contained below.
Defined terms used in this announcement shall have the same meaning as those
terms defined and used in the Circular dated 17 June 2016.
For further information please contact:
Verona Pharma plc Tel: +44 (0)20 3283 4200
Jan-Anders Karlsson, Chief Executive
Officer
N+1 Singer (Nominated Adviser and Tel: +44 (0)20 7496 3000
Broker)
Aubrey Powell / Jen Boorer
FTI Consulting Tel: +44 (0)20 3727 1000
Simon Conway/Stephanie Cuthbert
IMPORTANT NOTICE
The Circular is not an offer of securities for sale in the United States. The
securities being offered by the Company may not be offered or sold in the
United States absent registration or an exemption from registration. The
offering of securities described in the Circular has not been and will not be
registered under the United States Securities Act of 1933, and accordingly, any
offer or sale of the securities may be made only in a transaction exempt from
the registration requirements of the Securities Act.
Notes to Editors
About Verona Pharma plc
Verona Pharma plc is a UK-based clinical stage biopharmaceutical company
focused on the development of innovative prescription medicines to treat
respiratory diseases with significant unmet medical needs, such as chronic
obstructive pulmonary disease (COPD), asthma and cystic fibrosis.
Verona Pharma's lead drug, RPL554, is a first-in-class drug currently in phase
II trials as a nebulised maintenance treatment for COPD patients with moderate
to severe disease and possibly as a treatment of acute exacerbations of COPD in
the hospital setting. The drug is a dual phosphodiesterase (PDE) 3/4 inhibitor
and therefore has both bronchodilator and anti-inflammatory effects, which are
essential to the improvement of patients with COPD and asthma.
Verona Pharma is also building a broader portfolio of RPL554-containing
products to maximise its benefit to patients and its value. This includes the
very significant markets for COPD and asthma maintenance therapy. The Company
is also exploring the potential of the drug in different diseases, such as
cystic fibrosis, where it is in pre-clinical testing and has recently received
a Venture and Innovation Award from the Cystic Fibrosis Trust.
About Chronic Obstructive Pulmonary Disease (COPD)
Sixty-five million people worldwide suffer from moderate to severe COPD and the
World Health Organisation (WHO) expects COPD to be the 3rd leading cause of
death globally by 2020. It is the only major chronic disease with increasing
mortality. Currently available drugs are aimed at long-term maintenance
therapy, with the market dominated by large pharma. Despite the wide
availability of these therapies, COPD patients suffer acute periods of
worsening symptoms (exacerbations), which cause, in the US alone, some 1.5
million A&E visits, 726,000 hospitalisations and 120,000 deaths per annum.
Bronchodilator therapy is considered to be the standard of care, and agents can
be administered via handheld devices such as metered dose inhaler (MDI), dry
powder inhaler (DPI) and by nebulisers. The nebulised bronchodilator market was
worth about $1 billion in 2014 in the US1. RPL554 is being developed by Verona
Pharma as an add-on therapy to the "Standard of Care" with the objectives of
providing rapid and pronounced improvement in lung function, reduced symptoms
and both shortened duration of hospital stays and reduced re-admission rates 30
days after discharge from hospital. Studies to date on RPL554 have demonstrated
that it has a strongly differentiated 3-way mode of action, being: (1)
bronchodilation (the relaxation of smooth muscle in the airway); (2)
anti-inflammatory effects on cells and (3) ion channel activation in epithelial
cells, with increased mucociliary clearance of the airway.
1 IMS Consulting Group market research 2014
ADDITIONAL INFORMATION
Warrant Shares
At the recent GM, the Company obtained full authority from Shareholders to
issue and allot up to 622,318,538 Warrant Shares, being the maximum possible
number of further new Ordinary Shares which may arise following the valid
exercise of Warrants in due course.
None of the Warrant Shares are included in the Total Voting Rights figure
above. For the avoidance of doubt, the Warrants themselves will not be
separately admitted to trading on AIM, but any Warrant Shares issued and
allotted following the valid exercise of Warrants will become part of the
single class of Ordinary Shares admitted to trading on AIM and will rank pari
passu with all other Ordinary Shares.
The Warrants are capable of exercise on the earlier of the Company's planned US
IPO or the anniversary of Admission of the Placing Shares, and the exercise
period shall end on the fifth anniversary of such date. In the event that the
Company announces a definitive agreement providing for an Acquisition prior to
the closing of Tranche 2, the exercise period shall instead begin immediately
following such announcement but still end as above.
The Warrants may be exercised either in cash or on a cashless exercise basis,
whereby the Warrantholder will forgo such number of Warrant Shares as represent
at the relevant time the value of the cost of exercise, and receive bonus
shares equal to the Warrantholder's net entitlement. Shareholders should note
that the net number of Warrant Shares to be received in connection with a
cashless exercise of Warrants will be determined by the future price of the
Company's Shares. Warrantholders must also be Shareholders in order to be able
to exercise any of their Warrants on a cashless exercise basis.
The maximum number of Warrant Shares above assumes that all Warrants are
exercised on a 'for cash' basis. The number of Warrant Shares arising will be
lower than the maximum possible if the cashless exercise mechanism is used by
any Warrantholders (as is described in more detail in paragraph 5 of part I and
paragraph 4.4 of part III of the Circular).
If Tranche 2 is completed within a year after Tranche 1, to the extent that any
Placee does not fully subscribe for an equivalent value of Ordinary Shares or
ADSs in Tranche 2 (including the value of any Ordinary Shares or ADSs acquired
in any concurrent Exempt Placement made on substantially the same terms as the
US IPO) as subscribed for in Tranche 1, subject to allocations in Tranche 2
being potentially adjusted downwards by the underwriter in connection with the
US IPO, such Placee will (subject to certain limited exceptional circumstances)
forfeit any Warrants issued to it in Tranche 1. However, if the Placee's
allocation is reduced by the managing underwriter in the US IPO, then the
required level of participation to retain the Warrants in full shall be only
that amount that is allocated to the Placee in Tranche 2.
Given the potential cashless exercise mechanism of the Warrants (and also the
possible forfeiture of Warrants as described above), it is likely, in the
Company's reasonably held opinion, that the number of Warrant Shares to be
issued following the exercise of Warrants over time will be materially lower
than the maximum number possible.
Block Listing
Based on the application to the London Stock Exchange for a block admission of
Warrant Shares, the Company has been granted a block listing over a total of up
to 513,143,965 Ordinary Shares. The Company expects to apply for extensions to
the block listing for the purpose of issuing additional Warrant Shares from
time to time, as appropriate. Verona Pharma retains full authority to issue and
allot new Ordinary Shares to satisfy the exercise of Warrants in full.
Tranche 2 (US IPO)
Pursuant to the Purchase Agreement, the Company has agreed to use its
commercially reasonable efforts to complete a firm commitment registered public
offering of ADSs in the United States with an aggregate offering size
reasonably acceptable to the Company and to the holders of a majority of the
Units issued in the Placing, coupled with a listing of such ADSs on NASDAQ. The
Company has agreed to use its commercially reasonable efforts to consummate the
US IPO as promptly as possible and no later than 180 days following Admission,
or by such later date as may be agreed by the Company and Placees holding a
majority of the US Units issued in the US Placing. We refer to the US IPO and
the concurrent Exempt Placement as 'Tranche 2'. Following the US IPO and as
requested by Placees, New Shares held by such Placees may be converted into
ADSs (subject to any limitations under United States securities laws). The
Company will pay the reasonable expenses of the Placees in respect of the
conversion of New Shares issued in connection with the Placing into ADSs (to
the extent required) at the appropriate time.
It is expected that the Company's entire share capital will remain admitted to
trading on AIM following the US IPO. Any such transaction will require separate
approval by Shareholders. While the Company has agreed to use its commercially
reasonable efforts to facilitate the US IPO, there is no certainty that the US
IPO will proceed as targeted, or at all. Additional information in respect of
the prospective US IPO is set out in part II of the Circular.
The ADSs will be negotiable instruments, representing ownership of Ordinary
Shares. They are designed to facilitate the purchase, holding and sale of
Ordinary Shares by US investors. Each of the offered ADSs will represent an
exact number of Ordinary Shares. This number will be determined by the
Directors during the offering process.
END
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