TIDMVENN
RNS Number : 5908Y
Venn Life Sciences Holdings PLC
10 May 2019
10 May 2019
Venn Life Sciences Holdings Plc
("Venn", "Venn Life Sciences" or the "Company")
Conditional Acquisition of Open Orphan DAC ("Open Orphan")
Suspension of Trading
Board Changes
Proposed fundraising
Venn Life Sciences, an Integrated Drug Development Partner
offering a combination of drug development expertise and clinical
trial design and management to pharmaceutical, biotechnology and
medical device organisations, has conditionally agreed to acquire
the entire issued and to be issued share capital of Open Orphan for
an aggregate consideration of approximately GBP5.7 million, to be
satisfied by the allotment and issue of new ordinary shares of 0.1
pence each in the capital of the Company ("New Ordinary Shares")
(the "Acquisition"). Under the terms of the Acquisition, New
Ordinary Shares are expected to be issued to existing Open Orphan
shareholders with reference to a relative value of Venn of
approximately GBP4.0 million. The Acquisition remains conditional
on, inter alia, the approval by Venn's shareholders.
Highlights
-- The Company and its group as enlarged by the Acquisition
("Enlarged Group") will target the fragmented orphan drug services
market in Europe
-- The orphan drug sector is one of the fastest growing sectors
in the global pharmaceutical industry and over 50% of all new US
Food and Drug Administration ("FDA") approved drugs coming to
market are for rare/orphan conditions
-- The Open Orphan strategy is to build upon its existing
capability and expertise within orphan drugs to become a
full-service consultancy for orphan and other speciality healthcare
products
-- Open Orphan has identified an extensive pipeline of target
acquisitions primarily in the regulatory approval, reimbursement
and product launch areas where the Directors perceive that
companies need the most help navigating the complex European
market
-- The Directors intend to undertake an equity fundraise to new and existing investors
-- Cathal Friel, non-executive chairman of Venn, becomes CEO
with immediate effect and following satisfaction of all outstanding
conditions and re-admission of the Company's enlarged issued share
capital to trading on the AIM market of London Stock Exchange plc
("AIM") and to the Euronext Growth Market of Euronext Dublin, Dr
Maurice Treacy will be appointed an executive director
Cathal Friel, CEO of Venn said:
"The combination of Venn and Open Orphan gives us a strong
platform and we have the pipeline and management team to go out and
build a leading full-service consultancy offering services to the
fast growing orphan drug market right across Europe."
The proposed Acquisition represents a reverse takeover under the
AIM Rules for Companies ("AIM Rules") and under the Euronext Growth
Rules for Companies ("Euronext Growth Rules") and may also give
rise to an obligation on the part of the shareholders of Open
Orphan and other concert party members (the "Open Orphan Concert
Party") to make a mandatory offer for the share capital of the
Company pursuant to Rule 9 of the City Code on Takeovers and
Mergers ("Takeover Code"). Accordingly, the Acquisition is also
conditional on, inter alia, receiving the approval of shareholders
of the Company to a reverse takeover under the AIM Rules and under
the Euronext Growth Rules, and a waiver of the obligations of the
Open Orphan Concert Party to make a mandatory offer for the Company
pursuant to Rule 9 of the Takeover Code and on the admission of the
New Ordinary Shares to trading on AIM and the Euronext Growth
Market.
The Company expects to publish an admission document for the
purposes of the AIM Rules and Euronext Growth Rules ("Admission
Document") in respect of the Enlarged Group and shareholder
circular in June 2019. Accordingly, trading in the Company's
ordinary shares will now be suspended until publication of the
Admission Document.
The Company will make further announcements in due course.
Acquisition Rationale
Open Orphan aims to build a leading, European-focused, rare and
orphan drug consulting services platform, building on its existing
capability through strategic and targeted acquisitions. The Venn
service offerings include drug development planning and strategy,
early drug development and clinical trials. This will enable the
Enlarged Group to assist the developers of rare and orphan drug
products from pre-clinical development of their products, into the
clinic and through clinical development. The Directors believe that
the Enlarged Group's regulatory approval, reimbursement, launch and
(once on the market) registry studies and post-launch efficacy
evidence capabilities complement the Company's existing core
business which includes a substantial element of clinical research
services to pharmaceutical companies many of which are existing
orphan drug companies.
The Enlarged Group will target the fragmented orphan drug
services market in Europe and offer a 'one-stop-shop' solution for
the development and commercialisation of orphan and rare drugs
within Europe. This solution will assist developers of rare and
orphan products and enable better outcomes for clients by offering
an integrated solution supporting developers with multiple clinical
and regulatory support services ensuring maximisation of the value
of, and access to, a product. Open Orphan has identified an
extensive pipeline of target acquisitions primarily in the
regulatory approval, reimbursement and product launch areas where
the Directors perceive that companies need the most help navigating
the complex European market.
The orphan drug sector is one of the fastest growing sectors in
the global pharmaceutical industry and over 50% of all new US FDA
approved drugs coming to market are for rare/orphan conditions.
Background to Open Orphan
Open Orphan was incorporated in the Republic of Ireland on 18
July 2017 with a strategy and product offering to develop a market
leading services platform for pharmaceutical and biotechnology
companies seeking to commercialise their products across Europe
with a particular focus on drugs treating rare diseases. It has
raised over EUR3 million from investors to build a platform that
facilitates obtaining European Medical Agency approval, and/or
relevant local approval, and pan-European reimbursement, for launch
and commercialisation of orphan and other rare disease drugs.
Since inception, Open Orphan has also developed an orphan drug
digital data driven platform comprising of:
1. Data Access Platform
Much of the investment to date within Open Orphan has been
focussed on building its database of over 500 pharmaceutical
companies with orphan drugs either approved or advancing through
clinical trials. All of these companies would be expected to look
to engage with physicians and key opinion leaders ("KOLs") across
Europe in order to market and sell their products. To this end the
Data Access Platform has compiled and detailed contact details of
over 4,000 physicians and KOLs across Europe with a focus on orphan
drugs. At present pharmaceutical companies can use specialised
providers to conduct a KOL mapping exercise to identify KOLs for a
condition. However, this is typically expected to be more expensive
than paying for annual access to Open Orphan's platform.
Open Orphan's Data Access Platform, with its connection to
European KOLs, allows Open Orphan to offer a low-cost virtual
representative ("Virtual Rep") service to pharmaceutical companies
with orphan drug assets. Open Orphan's Virtual Rep service can be
implemented at any stage of the lifecycle of a rare/orphan product;
it can be used as a tool to support the launch of a new product,
right the way through to promoting mature brands without incurring
the expense of additional field representatives.
The Directors expect that, for an annual fee, Open Orphan can
arrange for over 40 KOLs in Europe to get up to three touch points
per month with information on specific orphan drug products coming
to the European market generating recurring revenue for the
Enlarged Group. Engagement with KOLs is expected to be in the form
of:
-- Written communication;
-- Phone calls or webinars; and
-- Email communication.
2. Health Data Platform
Open Orphan has identified and begun establishing a patient
health data platform, with a focus on orphan diseases. This is
intended to be established in partnership with a number of patient
advocacy groups on a revenue share basis to encourage patients with
rare and orphan conditions to share their health data. Open Orphan
expects to generate future revenue from the brokering of aggregated
data to pharmaceutical companies on behalf of the patient advocacy
groups and in turn speeding up the development of new drugs for
these patient groups.
The health data platform is being constructed such that data
collection is simplified with EU citizens able to share their data
from other health data collection companies such as 23andMe, Inc
and Ancestry.com LLC, where individuals have previously shared and
retained co-ownership of the data. European data protection
legislation now allows individuals greater control over their data
and how it is used for commercial purposes.
Open Orphan Acquisition Strategy
Within Europe, the orphan drug pharmaceutical services market is
highly fragmented with a large number of smaller scale
consultancies. This is in part the result of a fragmented
regulatory system in Europe where, despite an EU-wide regulator,
reimbursement needs to be negotiated on a country by country basis.
The Open Orphan strategy is to build upon its existing capability
and expertise within orphan drugs to become a full-service
consultancy for orphan and other speciality healthcare products.
The Directors intend to pursue an acquisition focussed strategy to
expand the capability of the Enlarged Group and believe that the
development work already completed gives the Enlarged Group an
effective platform from which to act as an attractive consolidator.
The Directors believe that the experience of the Board in
identifying and managing acquisitions along with specific industry
expertise will enable the Enlarged Group to embark on a
consolidation-focussed strategy.
In addition, Open Orphan has established a preferred provider
network across Europe, with over 40 service providers having signed
agreements. This platform will be utilised to service the Enlarged
Group's clients and complement its acquisition strategy.
Proposed Fundraise
The Directors intend to undertake an equity fundraise to new and
existing investors. The proceeds of the proposed fundraise will be
used support the Enlarged Group's business plan and provide
consideration for future acquisitions and working capital. Further
details will be announced in due course.
Board Changes
Following the signing of the share purchase agreement in respect
of the Acquisition, the Board has agreed that Cathal Friel,
non-executive chairman of Venn, becomes CEO with immediate effect.
Tony Richardson will remain on the Board as Corporate Development
Director and Brendan Buckley will become non-executive
Chairman.
Additionally, it is proposed that, following satisfaction of all
outstanding conditions and re-admission of the enlarged issued
share capital of the Company to trading on AIM and the Euronext
Growth Market, Dr Maurice Treacy will be appointed as an executive
director of the Company. Maurice was most recently a founder of
HiberGen and one of the founders of Genomics Medicine Ireland,
which was recently acquired by WuXI NextCODE. Genomics Medicine
Ireland was established to research the role of genetics in
disease, leading to new prevention strategies and treatments.
Maurice's experience of successfully starting a number of life
science ventures will be invaluable to the Enlarged Group going
forward.
Related Party Transaction
The Acquisition is a related party transaction for the purposes
of Rule 13 of the AIM Rules. The Directors, other than Mike Ryan
and Christian Milla (the "Independent Directors"), hold equity
interests in Open Orphan, and therefore are not considered to be
independent for the purposes of considering and negotiating the
Acquisition. The Independent Directors consider, having consulted
with Arden Partners plc, the Company's nominated adviser, that the
terms of the Acquisition are fair and reasonable in so far as the
Company's shareholders are concerned.
The Acquisition is a related party transaction for the purposes
of Rule 13 of the Euronext Growth Rules. The Directors, other than
the Independent Directors, hold equity interests in Open Orphan,
and therefore are not considered to be independent for the purposes
of considering and negotiating the Acquisition. The Independent
Directors consider, having consulted with Davy, the Company's
Euronext Growth adviser, that the terms of the Acquisition are fair
and reasonable in so far as the Company's shareholders are
concerned.
Enquiries:
Venn Life Sciences Holdings Plc Tel: +353 (0)1 5499 341
Cathal Friel, Chief Executive Officer
Arden Partners (Nominated Adviser and Joint Broker) Tel: +44
(0)20 7614 5900
John Llewellyn-Lloyd / Ruari McGirr / Benjamin Cryer
Davy (Euronext Growth Adviser and Joint Broker) Tel: +353 (0)1
679 6363
Anthony Farrell (Corporate Finance) / Ivan Murphy
Camarco (Financial PR) Tel: +44 (0)20 3757 4980
Tom Huddart / Billy Clegg / Daniel Sherwen
About Venn Life Sciences
Venn Life Sciences is an Integrated Drug Development Partner
offering a combination of drug development expertise and clinical
trial design and management to pharmaceutical, biotechnology and
medical device organisations. Venn has dedicated operations in
France, Germany, the Netherlands, the UK and Ireland with partners
across Europe and the US.
Further information in relation to Venn Life Sciences
www.Vennlifesciences.com
Venn Life Sciences: getintouch@vennlife.com
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END
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