TIDMMTPH
RNS Number : 1167K
Midatech Pharma PLC
19 December 2022
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IN WHICH OFFERS OR SALES WOULD BE PROHIBITED BY APPLICABLE LAW.
THIS ANNOUNCEMENT IS NOT AN OFFER TO SELL OR A SOLICITATION TO BUY
SECURITIES IN ANY JURISDICTION, INCLUDING THE UNITED STATES,
CANADA, AUSTRALIA, JAPAN AND THE REPUBLIC OF SOUTH AFRICA. NEITHER
THIS ANNOUNCEMENT NOR ANYTHING CONTAINED HEREIN SHALL FORM THE
BASIS OF, OR BE RELIED UPON IN CONNECTION WITH, ANY OFFER OR
COMMITMENT WHATSOEVER IN ANY JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF REGULATION 2014/596/EU (WHICH FORMS PART OF
DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT
2018), AS AMED. IN ADDITION, MARKET SOUNDINGS WERE TAKEN IN RESPECT
OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT
CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL
THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.
Midatech Pharma PLC
("Midatech" or the "Company")
Closing of Registered Direct Offering
Revised Private Placement and Bioasis Loan Terms
Continued Admission to Trading on AIM
and
Webinar for Shareholders at 2.00pm GMT on Tuesday 20 December
2022
Midatech Pharma Plc (AIM: MTPH; Nasdaq: MTP), an R&D
biotechnology company focused on improving the bio-delivery and
biodistribution of medicines, announces a number of updates related
to its proposed acquisition of Bioasis Technologies Inc.
("Bioasis") and associated financing.
Background to and reasons for the proposed acquisition of
Bioasis (the "Acquisition")
As previously announced, the Company has sufficient funding
until March 2023. Accordingly, the Board has for some time actively
sought and assessed potential opportunities for raising finance to
both extend the Company's cash runway and progress its key
development assets. These included opportunities which would have
likely resulted in winddown of the Company's operations with no
meaningful value placed on the Company's assets other than its
listings on NASDAQ and AIM, and transactions that, due to their
size, would require re-admission to AIM, a re-listing on NASDAQ and
filing of a new Registration Statement with the SEC which would
have exhausted the Company's remaining cash resources.
Therefore, having considered the actionable options available to
the Company, especially including consideration of the impact of
dilution on existing investors, the Board has concluded that an
acquisition of Bioasis, a company which it believes has a promising
development pipeline, along with a US$10 million aggregate
financing offers a compelling strategic opportunity for Midatech
shareholders, including:
-- transition from a drug delivery platform-based company to a therapeutics company;
-- a focus on rare and orphan diseases, conferring advantages
such as smaller, lower cost studies, higher in-market prices; and
market exclusivity for seven years and 10 years in the US and
Europe, respectively;
-- a robust internal therapeutics pipeline of five programmes in
six indications and therefore less reliance on R&D
collaborations with third parties;
-- access to a number of enabling platform technologies that
have been validated by partnerships and licenses with
pharmaceutical companies with potential milestone payments, should
various performance conditions be met, totalling in excess of
US$200 million;
-- improved news flow including clinical data; and
-- lower combined overheads.
Information on Bioasis
Bioasis is a multi-asset rare and orphan disease
biopharmaceutical company developing clinical stage programs based
on epidermal growth factors and a differentiated, proprietary
xB3(TM) platform for delivering therapeutics across the blood-brain
barrier and the treatment of central nervous system disorders in
areas of high unmet medical need.
The Enlarged Group is expected to benefit from the collective
scientific, technical, and operational expertise of both Midatech
and Bioasis and to unlock value as the pipeline programs progress
through clinical development and the drug delivery technologies
secure additional partnerships.
Financing update
The Company previously announced a two-part financing for an
aggregate amount of US$10.0 million as follows with Armistice
Capital (the "Placee"):
-- A registered direct offering (the "Offering") of 393,973 of
its American Depositary Shares ("ADSs") (each ADS representing 25
of the Company's ordinary shares (the "New Ordinary Shares")) at a
purchase price of US$1.00 per ADS (equivalent to GBP0.0328 per New
Ordinary Share). The Offering closed on 16 December 2022 with gross
proceeds of approximately US$0.4 million (GBP0.3 million). Net
proceeds from the Offering are expected to be approximately US$0.3
million (GBP0.2 million), after deducting the placement agent's
fees and other estimated offering expenses. The Company intends to
use the net proceeds from the Offering to fund part of a loan to
Bioasis in the amount of US$750,000 (the "Loan").
-- A private placement (the "Private Placement") to raise the
remaining US$9.6 million of gross proceeds, subject, inter alia, to
shareholder approval at a forthcoming General Meeting. The funds
provided to the Company pursuant to the Private Placement are to be
provided by way of a combination of (i) the direct subscription of
Units comprising (one ADS, 1.04 A Warrant and 1.04 B Warrant), and
(ii) through the funding of Pre-funded Warrants, whereby the Placee
will, on Completion of the financing, provide the Company with the
funds to exercise the Pre-funded Warrants, such that the exercise
price of the Pre-funded Warrants (other than a notional additional
consideration) will be received by the Company at Completion,
enabling the Placee to exercise the warrants and acquire ADSs for
nominal cost. Such a structure ensures the Company receives the
full proceeds (US$9.6 million gross) of the Offering immediately on
Completion, while enabling the Placee to limit its shareholding in
the Company to a maximum of 9.99% at all times.
-- Ladenburg Thalmann & Co. Inc. is acting as the exclusive
placement agent for the Offering and the Private Placement.
Revised terms of the Financing
The Company and the Placee have agreed to an amendment to the
Securities Purchase Agreement which provides that:
-- The exercise price of the A Warrants is increased US$1.10;
-- The exercise price of B Warrants is increased to US$1.10;
-- The purchase price of the Private Placement will be the lower
of (i) US$1.00 (the previously agreed purchase price) and (ii) the
20-day volume weighted average price on the last business day prior
to Completion ("VWAP") less 10%;
-- If the 20-day VWAP prior to Closing is less than $0.90, the
Company may terminate the Private Placement without penalty;
and
-- The Placee may not, directly or indirectly, engage in short-selling prior to Closing.
The abovementioned revision of the terms of the Private
Placement resulted from the Company's disclosure of one
shareholder's adverse response to the proposed Acquisition and
their proposed course of action, which was beyond Midatech's
ability to control.
Apart from the increase in the A and B Warrant exercise prices,
the key benefit to the Company with these revised terms is the
contractual ability to terminate the Private Placement at the
Company's sole discretion, without penalty, in the event the
Company's share price is less than US$0.90 per ADS at Closing.
All other terms remain the same as previously announced.
An illustrative pro forma capitalisation table assuming
Completion of the Acquisition and Private Placement at US$0.90 per
ADS (GBP0.0296 per Ordinary Share) is attached as an Appendix. This
table is included for indicative purposes only to demonstrate the
level of dilution in only one particular scenario. The price of the
Private Placement may be different from that indicated and
accordingly resultant shareholdings will be different.
Bioasis Loan Update
As announced on 13 December 2022 the Company intends to use the
proceeds from the Offering to fund part of the Loan. The Company
and Bioasis have agreed to amend the Arrangement Agreement between
the parties such that the Loan will now be made in three tranches
of US$250,000 payable on each of 19 December 2022, 3 January 2023
and 6 February 2023 as opposed to one payment of the Loan in
full.
AIM Cancellation Update
The Company has garnered views from certain of its shareholders
with regard to the proposed cancellation to trading on AIM ("AIM
Cancellation") and is pleased that support for the Company's AIM
listing remains strong. As a result, the Company no longer intends
to include a resolution seeking shareholder consent to the AIM
Cancellation or a resolution to amend its Articles of Association
at its proposed General Meeting to be convened to approve, inter
alia, the Acquisition.
Prospectus and Circular
The ADSs described above were offered pursuant to a shelf
registration statement (File No. 333-267932) which became effective
on 26 October 2022. The offering of the ADSs was made by means of a
prospectus, including a prospectus supplement, forming part of the
effective registration statement. Copies of the prospectus
supplement and the accompanying prospectus relating to the offering
may be obtained from the SEC's website at http://www.sec.gov or
from Ladenburg Thalmann & Co. Inc., at Attn: Prospectus
Department, 640 Fifth Avenue, 4th Floor, New York, NY 10019 or by
e-mail at prospectus@ladenburg.com .
A circular to shareholders containing further details in
relation to the proposals will be sent to shareholders in January
2023.
Total Voting Rights
Following closing of the Offering, the Company's issued ordinary
share capital consists of 108,342,738 ordinary shares. The Company
does not hold any shares in treasury. Therefore, the total number
of ordinary shares with voting rights in Midatech is
108,342,738.
The above figure of 108,342,738 may be used by shareholders as
the denominator for the calculations by which they will determine
if they are required to notify their interest in, or a change to
their interest in the Company under the FCA's Disclosure Guidance
and Transparency Rules.
Letters of Intent
The Board is aware that one party which has provided a Letter of
Intent has reduced its shareholding in the Company, impacting the
number of shares subject to Letters of Intent. The Board will
provide an update on shareholder intentions so far as it is able in
the Circular to be posted in January 2023.
No solicitation
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of
these securities in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or
jurisdiction.
Webinar
The Company will be hosting a virtual meeting by Zoom webinar on
Tuesday 20 December at 2.00pm GMT. Please register your attendance
on the following link and the webinar details will be sent to
you.
https://us02web.zoom.us/webinar/register/WN__8ckSaivQuSeo8zGvSKaFg
Shareholders are strongly encouraged to attend the webinar and
to participate by submitting questions on the Acquisition and the
Private Placement via the Q&A function at any time during the
webinar. The Board will be highlighting the benefits and key terms
of the Acquisition and the Private Placement and will answer
questions at the meeting.
Exchange rate
Unless otherwise specified, this announcement contains certain
translations of US Dollar into amounts in Pounds Sterling based on
the exchange rate of GBP1.00 = US$ 1.2178.
Defined terms used in this announcement have the same meaning as
set out in the announcement of 13 December 2022.
For more information, please contact :
Midatech Pharma PLC
Stephen Stamp, CEO
Tel: +44 (0)29 20480 180
www.midatechpharma.com
Strand Hanson Limited (Nominated Adviser)
James Dance / Matthew Chandler / Rob Patrick
Tel: +44 (0)20 7409 3494
Turner Pope Investments (TPI) Ltd (Broker)
Andrew Thacker / James Pope (Corporate Broking)
Tel: +44 (0)20 3657 0050
IFC Advisory Limited (Financial PR and UK Investor Relations)
Tim Metcalfe / Graham Herring
Tel: +44 (0)20 3934 6630
Email: midatech@investor-focus.co.uk
Edison Group (US Investor Relations)
Alyssa Factor
Tel: +1 (860) 573 9637
Email: afactor@edisongroup.com
About Midatech Pharma PLC
Midatech Pharma PLC (currently dual listed on AIM: MTPH; and
NASDAQ: MTP) is a drug delivery technology company focused on
improving the bio-delivery and bio-distribution of medicines. The
Company combines approved and development medications with its
proprietary and innovative drug delivery technologies to provide
compelling products that have the potential to powerfully impact
the lives of patients.
The Company has developed three in-house technology platforms,
each with its own unique mechanism to improve delivery of
medications to sites of disease. All of the Company's technologies
have successfully entered human use in the clinic, providing
important validation of the potential for each platform:
-- Q-Sphera(TM) platform: a disruptive micro-technology used for
sustained release to prolong and control the release of
therapeutics over an extended period of time (from weeks to
months).
-- MidaSolve(TM) platform: an innovative nanotechnology used to
dissolve insoluble drugs so that they can be administered in liquid
form directly and locally into tumours.
-- MidaCore(TM) platform: a leading-edge nanotechnology used for
targeting medications to sites of disease.
The platform nature of its technologies offers the potential to
develop multiple drug assets rather than being reliant on a limited
number of programmes. Midatech's technologies are supported by 36
patent families including 120 granted patents and an additional 70
patent applications. Midatech's headquarters and R&D facility
is in Cardiff, UK. For more information please visit
www.midatechpharma.com.
Forward-Looking Statements
Certain statements in this announcement may constitute
"forward-looking statements" within the meaning of legislation in
the United Kingdom and/or the United States Private Securities
Litigation Reform Act. All statements contained in this
announcement that do not relate to matters of historical fact
should be considered forward-looking statements.
In certain cases, forward-looking statements can be identified
by the use of words such as "plans", "expects" or "does not
anticipate", or "believes", or variations of such words and phrases
or statements that certain actions, events or results "may",
"could", "would", "might" or "will be taken", "occur" or "be
achieved". In particular, this news release contains
forward-looking information pertaining to the following: statements
regarding the Acquisition and Private Placement, including with
respect to the benefits of the Acquisition and the Private
Placement and expectations regarding the combined company
(including its drug delivery technologies and their progress
towards approval and commercialization, its market presence and
financial condition); the timing of key Acquisition and Private
Placement milestones and closing; the ability of Midatech and
Bioasis to satisfy the conditions to and to complete the
Acquisition and the Private Placement, the Registered Direct
Offering and the Private Placement; and expectations regarding the
impact of the Acquisition on Midatech and Bioasis including in
respect of anticipated financial and operating results, strategy
and business, and on stakeholders in general. Forward-looking
statements and information are subject to various known and unknown
risks and uncertainties, many of which are beyond the ability of
Midatech to control or predict, that may cause their actual
results, performance or achievements to be materially different
from those expressed or implied thereby, and are developed based on
assumptions about such risks, uncertainties and other factors set
out herein, including but not limited to: the satisfaction of the
conditions precedent to the closing of the Acquisition and Private
Placement (including the obtaining of all shareholder, court, and
regulatory approvals); risks associated with the Acquisition and
acquisitions generally; the court arrangement agreement in relation
to the Acquisition may be terminated in certain circumstances;
Midatech will incur costs even if the Acquisition and Private
Placement is not completed; all necessary approvals and consents
may not be obtained; uncertainty regarding the ability of the
parties to complete all Acquisition milestones on the intended
timing; and other related risks and uncertainties.
Reference should be made to those documents that Midatech shall
file from time to time or announcements that may be made by
Midatech in accordance with the London Stock Exchange's AIM Rules
for Companies ("AIM Rules"), the Disclosure and Transparency Rules
("DTRs") and the rules and regulations promulgated by the US
Securities and Exchange Commission, which contains and identifies
other important factors that could cause actual results to differ
materially from those contained in any projections or
forward-looking statements. These forward-looking statements speak
only as of the date of this announcement. All subsequent written
and oral forward-looking statements by or concerning Midatech are
expressly qualified in their entirety by the cautionary statements
above. Except as may be required under the AIM Rules or the DTRs or
by relevant law in the United Kingdom or the United States,
Midatech does not undertake any obligation to publicly update or
revise any forward-looking statements because of new information,
future events or otherwise arising.
APPIX
Pro forma capitalisation table assuming Completion of the
Private Placement at US$0.90 per ADS (GBP0.0296 per Ordinary
Share). The price of US$0.90 is included for indicative purposes
only and the eventual price and resultant shareholdings will likely
be different to those presented below.
Issued A Warrants
Ordinary Pre-funded Existing and B Cresence
Shares Undiluted Warrants Warrants Warrants Shares Options Fully Diluted
------------ ---------- ------------ ----------- ------------ ---------- ----------- -----------------------
Note 1 2 3
Pre-
Announcement
31 December
2022 98,493,413 39.4% 17,226,053 3,007,197 118,726,663 9.7%
Offering 9,849,325 3.9% - 9,849,325 0.8%
------------ ---------- ------------ ----------- ------------ ---------- ----------- -------------- -------
Currently in
issue 108,342,738 43.4% 17,226,053 - - 3,007,197 128,575,988 10.5%
Bioasis
Security
holders
following
Completion 75,884,553 30.4% 21,285,497 8,481,459 105,651,509 8.6%
Cresence
founders 5,733,337 5,733,337 0.5%
Lind holdings
following
Completion 22,922,812 9.2% 45,845,624 68,768,436 5.6%
Placee
holdings
following
Completion 14,846,550 5.9% 251,987,525 553,366,800 820,200,875 67.1%
Ladenburg
holdings
following
Completion 27,863,856 11.2% 66,401,075 94,264,931 7.7%
TOTAL 249,860,509 100.0% 251,987,525 38,511,550 665,613,499 5,733,337 11,488,656 1,223,195,077 100.0%
------------ ---------- ------------ ----------- ------------ ---------- ----------- -------------- -------
Notes:
1. The Pre-funded Warrants have an exercise price of $0.001 per ADS.
2. The A Warrants and B Warrants have an exercise price of $1.10
per ADS (GBP0.0361 per Ordinary Share)
3. The Cresence Shares are issuable (i) 50% upon initiation of
the first pivotal clinical trial in the US for a Cresence product,
and (ii) 50% upon FDA approval of the first Cresence product.
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