THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF EU REGULATION 596/2014 AS IT FORMS PART OF DOMESTIC
LAW IN THE UNITED KINGDOM BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018. UPON THE PUBLICATION OF THIS ANNOUNCEMENT
VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION WILL
BE CONSIDERED TO BE IN THE PUBLIC DOMAIN.
16
December 2024
Graft Polymer (UK) Plc
("Graft Polymer" or the "Company")
Proposed acquisition of Awakn
Life Sciences Corp.
The board of Graft Polymer (UK) Plc
(LON: GPL), an innovative biotechnology company co-developing
therapeutics for mental health disorders, is pleased to announce
that the Company has entered into a binding letter of agreement
(the "LOA") regarding the proposed acquisition of the entire issued
share capital of Awakn Life Sciences Corp. ("Awakn"), a
clinical-stage biotechnology company developing therapeutics for
substance use and mental health disorders (the "Proposed
Acquisition").
Graft Polymer intends to issue
approximately 2,074,378,592
new ordinary shares of £0.001 each ("Ordinary
Shares") as consideration for the Proposed Acquisition of Awakn
(the "Consideration Shares"). The Proposed Acquisition values
Awakn at approximately £4.98 million (CAN$8.89 million) based upon
the closing price of the Ordinary Shares on 13 December 2024, being
0.24 pence per Ordinary Share (the "Issue Price").
The Proposed Acquisition remains
subject to a number of conditions, including the completion of due
diligence to the satisfaction of both parties, regulatory and
shareholder approval, as well as the negotiation and entry into a
final definitive agreement (the "Definitive Agreement") and the
publication of a secondary prospectus by Graft Polymer in
connection with, inter alia, the issue of the Consideration Shares.
Accordingly, there can be no certainty that a Definitive
Agreement will be executed or that the Proposed Acquisition will
complete, or as to timing.
Further details on the Proposed Acquisition
The Proposed Acquisition is subject
to and conditional upon the conditions (as set out below) having
been satisfied or waived on or before the date six months from the
date of the LOA, being 15 June 2025 (the "Long Stop Date") or such
later date as agreed to in writing between Graft Polymer and
Awakn.
Graft Polymer is proposing to
acquire all issued and outstanding common shares (the "Common
Shares") in the capital of Awakn, all outstanding restricted share
units ("RSUs") in the capital of Awakn, and all outstanding
deferred share units (the "DSUs") in the capital of Awakn
immediately prior to the completion of the Proposed
Acquisition. Graft Polymer will issue to Awakn shareholders
46.67 Consideration Shares for every one Common Share held by them
(the "Exchange Ratio"). Based on the same Exchange Ratio, the
holders of DSUs and RSUs will receive 46.67 Consideration Shares
for each one DSU and for each one RSU held by
them.
The Company expects to issue
approximately 2,074,378,592
Consideration Shares at the Issue Price in
satisfaction of the consideration for the acquisition of the
acquisition of all outstanding Common Shares, the DSUs and RSUs
expected to be in issue immediately prior to completion of the
Proposed Acquisition. The Company will not issue fractional
entitlements to Consideration Shares and each Awakn common stock
holder, DSU holder and RSU holder will therefore receive
Consideration Shares rounded down to a whole number of
Consideration Shares (as determined by the Company). The
consideration for the Proposed Acquisition is valued at
approximately £4.98 million, or CAN$8.89 million, based on the
Issue Price and using an exchange rate of
CAN$0.56:£1.00.
It is proposed that holders of all
issued and outstanding common share purchase warrants (the
"Warrants") in Awakn shall be exchanged for new warrants over new
Ordinary Shares in Graft Polymer based upon the Exchange
Ratio. It is intended that Awakn will seek the consent from
holders of stock options to cancel all existing stock options
issued by Awakn.
It is intended that the Proposed
Acquisition will be effected by way of a Canadian plan of
arrangement pursuant to the Business Corporations Act (British
Columbia) (the "Plan of Arrangement"). The Proposed
Acquisition will be subject to, inter alia, the approval of the
Plan of Arrangement by Awakn's shareholders.
It is intended that following the
successful completion of the Proposed Acquisition and admission of
the Consideration Shares to trading on the
Main Market of the London Stock Exchange and to listing on the
equity shares (transition) category of the FCA's Official List,
Awakn will no longer maintain its quotation on the Canadian
Securities Exchange, the FSE or the OTCQB.
The Proposed Acquisition will be
conditional on the satisfaction (or waiver) of certain conditions
on or before the Long Stop Date, including:
·
the satisfactory completion, by each of the
parties to the transaction, of legal, financial and commercial due
diligence;
·
approval of the boards of both Graft Polymer and
Awakn of the definitive transaction documents;
·
the receipt of all necessary regulatory consents
and approvals required for the Proposed Acquisition;
·
the approval of the Plan of Arrangement by the
British Columbia court;
·
the approval of Awakn's shareholders;
·
the consent of holders of stock options in Awakn
to the cancellation of such stock options;
·
obtaining the necessary regulatory approvals of
the Financial Conduct Authority in relation to a prospectus which
is required pursuant to the Prospectus Regulation rules in order
for Graft Polymer to issue the Consideration Shares;
·
the approval of the Company's shareholders, at a
general meeting of the Company (to be convened), of resolutions to
provide authority to the Directors to issue and allot the
Consideration Shares, otherwise than on a pre-emptive
basis;
·
the parties agreeing, signing and exchanging the
Definitive Agreement; and
·
the admission of Consideration Shares to trading
on the Main Market of the London Stock Exchange and to listing on
the equity shares (transition) category of the FCA's Official List
("Admission").
The Plan of Arrangement is subject
to both Awakn shareholder and court approvals in Canada, which are
governed by certain statutory timelines and processes. Once the
Definitive Agreement has been executed it is anticipated that the
Proposed Acquisition will be completed in approximately 60 to 75
days.
Potential related party transaction and Director's interest in
the Proposed Acquisition
The Company's CEO, Anthony Tennyson,
also serves as CEO of Awakn and has a shareholding in Awakn of 4.85
per cent. Anthony Tennyson does not have an interest in the
share capital of Graft Polymer. The corporate board of Awakn
comprises five directors, of which there are 4 independent
non-executive directors. It is noted that Anthony Tennyson
is, nevertheless, a member of the key management personnel of Awakn
and as a consequence could be deemed to have a significant
influence over Awakn. As Anthony Tennyson is the Company's
CEO he is deemed to be a related party of Graft Polymer.
Anthony Tennyson will, should the Proposed Acquisition
complete, receive approximately 108,400,689
Consideration Shares based upon his current holdings in Awakn
(being valued at approximately, £260,161 based on the Issue
Price).
Accordingly, Awakn could be
considered a related party of Graft Polymer given that Anthony
Tennyson is a member of the key management personnel of
Awakn.
The Proposed Acquisition could
therefore constitute a material related party transaction for the
purpose of Rule 7.3 of the FCA's Disclosure Guidance and
Transparency Rules. This material related party transaction has
been approved by the directors independent of the Proposed
Acquisition, being Dennis Purcell (Chairman) and Nicholas Nelson
(Non-Executive Director). Anthony Tennyson recused himself from the
Graft Polymer board's consideration of this transaction and did not
vote on the relevant board resolution.
In reaching their decision, the
independent Directors considered that the terms of the Proposed
Acquisition were fair and reasonable from the perspective of the
Company and of its shareholders (not accounting for any person who
is a related party). In particular, the independent Directors
considered the following:
·
Awakn's advanced clinical pipeline with
medium-term revenue potential through Awakn's lead programme,
AWK-001;
·
complementary expertise and synergies because of
both companies' therapeutic focus on addiction and mental health;
and
·
the enlarged group's strengthened position in the
UK biotechnology ecosystem due to a significant proportion of
Awakn's research being conducted in the UK.
Information about Awakn
Awakn is a clinical-stage
biotechnology company developing therapeutics targeting substance
use and mental health disorders. Awakn has a near-term focus on
Alcohol Use Disorder ("AUD"), a condition affecting approximately
29 million adults in the US and approximately 40 million in the US
and key European jurisdictions.
Awakn currently has three key
research and development programmes with a significant majority of
its activities occurring within the UK. Awakn's three key research
and development programmes are as follows:
1.
AWKN-001: an investigational,
novel medication-assisted treatment for severe AUD, targeting the
UK market, consisting of racemic ketamine (licensed medication in
the UK, approved for use as an anaesthetic and as an analgesic,
schedule 2 class B) delivered in combination with manualised
therapy. Currently, a phase 3 clinical trial is being undertaken in
the UK. The phase 2 trial was 100% funded by the UK Medical
Research Council (the "MRC"), part of the UK's Department of
Health. The phase 3 trial is being co-funded by a partnership
between: i) the MRC; ii) the UK National Institute for Health and
Care Research ("NIHR"); and iii) Awakn. The phase 3 trial is
being managed by the University of Exeter's Clinical Trials Unit
and is being run in 9 National Health Trusts in England.
2.
AWKN-002: an investigational
novel treatment for moderate and severe AUD targeting the US
market, consisting of esketamine (a derivative of ketamine, and a
licensed medication in UK, approved for the treatment of resistant
depression, schedule 2 class B) in an oral thin film plus
psycho-social support. A phase 1 trial has been completed
with phase 2 trial planning underway.
3.
Aminoindane NCE
("new chemical entity") research
programme: a pre-clinical programme
developing serotonin, dopamine, noradrenalin targeted small
molecule therapeutics for trauma related mental health disorders,
such as PTSD. Synthesis has been completed by Charnwood Discovery,
a provider of drug discovery services, in the UK, and in vitro
screening is being conducted by Eurofins Discovery, a leading
global provider of drug discovery products and services, in the
UK. In vivo testing has been conducted by the University of
Nottingham. Initial results from the pre-clinical study of AW21003,
a co-lead compound in the aminoindane NCE programme, were announced
by Graft Polymer on 11 December 2024.
The most recently published
unaudited financial statements for Awakn report total assets as at
31 October 2024 of CAN$668,812 and total liabilities of
CAN$2,192,164. For the nine months ended 31 October 2024 revenue
was CAN$35,343 and the loss from continuing operations was
CAN$1,281,934. Further
information see: https://awaknlifesciences.com/.
Dennis Purcell, Chairman of Graft Polymer,
commented:
"This proposed acquisition marks an
important milestone for Graft Polymer as we broaden our focus to
address the pressing global challenges of addiction and mental
health disorders. Awakn's advanced research and clinical programs
offer the potential to develop more effective and accessible
treatments for these critical areas of need. We believe this
strategic move will not only drive value for our shareholders but
also contribute meaningfully to improving the lives of millions
impacted by these conditions."
Appointment of Financial Adviser
Allenby Capital Limited has been
appointed as Financial Adviser, in addition to Broker, to the
Company.
Enquiries:
Graft Polymer (UK) Plc
Anthony Tennyson, CEO and Executive Director -
anthonytennyson@graftpolymer.co.uk
Allenby Capital (Financial Adviser and Broker)
+44 (0) 20 3328 5656
Nick Naylor
/ Liz Kirchner (Corporate Finance) | Guy McDougall
(Sales)
About Graft Polymer (UK) Plc
Graft Polymer (UK) Plc is an
innovative biotechnology company focused on developing
intellectual property relating to the treatment of mental health
and substance use disorders, and the co-development of therapeutics
for mental health disorders. Our mission is to improve
outcomes for individuals suffering from these conditions, with an
initial focus on trauma-related mental health disorders, such as
PTSD, which affected approximately 13 million adults in the U.S. in
2020, with the Company estimating a current affected population of
20 million across the US, UK and key EU markets.
For more information, please visit
www.graftpolymer.co.uk.