Financing Facility of up to £60 Million
NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO ANY JURISDICTION IN WHICH OFFERS OR SALES WOULD BE PROHIBITED BY APPLICABLE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. 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 (“MAR”). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
Hemogenyx Pharmaceuticals plc
(“Hemogenyx Pharmaceuticals” or the “Company”)
Financing Facility of up to £60 Million
Hemogenyx Pharmaceuticals plc (LSE: HEMO), the biopharmaceutical group developing new therapies and treatments for deadly blood diseases, today announces that it has entered into a convertible loan note financing facility (the “Facility”) with Mint Capital Limited (“Mint Capital”) pursuant to which it has conditionally agreed to issue up to £60 million in aggregate principal amount of convertible unsecured loan notes (the “Convertible Loan Notes”) to Mint Capital.
Mint Capital is a Bahamas-based investment management company which specialises in providing growth capital to companies around the world.
The Facility will be made available to the Company subject to certain conditions being met. After the issue of the first tranche of £12 million in principal amount of Convertible Loan Notes, use of the Facility will be solely at the discretion of the Company. Further details about the terms and conditions of the Convertible Loan Notes are set out below under “Further details of the Convertible Loan Notes”.
The Facility will allow Hemogenyx Pharmaceuticals to accelerate and broaden its development pipeline of novel therapies and treatments for blood cancers and viral diseases. It will also strengthen the Company’s negotiating position with both existing and future partners. Further details of the intended use of proceeds are set out below under “Use of proceeds”.
The issue of the Convertible Loan Notes is subject to, amongst other things, the Company obtaining shareholder approval to grant the Company’s directors (the “Directors”) the necessary authorities to issue the Convertible Loan Notes and the Company having published a prospectus approved by the U.K. Financial Conduct Authority (the “FCA”).
The Company’s CEO, Dr Vladislav Sandler, commented, “Our various product candidates have shown great results in our laboratory research and testing, and the Company is poised to move our product candidates into proof of concept and clinical studies. This significant facility will enable Hemogenyx Pharmaceuticals to move our life-saving technologies forward rapidly, placing the Company in a highly competitive position in the treatment of cancer and viral diseases.”
Use of proceeds
The Facility will allow the Company to bring even greater focus to bear on scientific and commercial advances. The funds will enhance Hemogenyx Pharmaceuticals’ control over its intellectual property assets under development and give it greater choice in determining what strategic partnerships to pursue and on what terms, enabling it to achieve maximum shareholder value.
Hemogenyx Pharmaceuticals has been successfully progressing in its development of its CDX antibody candidate (“CDX”) and its HEMO-CAR-T product candidate. In addition, the Company has carried out considerable preliminary work on the development of its cell therapy platform as a novel means to allow the programming of immune cells to target both viral infections, including COVID-19, and certain types of cancer.
The Company intends to use the net proceeds of the issue of the Convertible Loan Notes to accelerate the development and marketability of its product candidates as follows:
- Achieve clinical proof of concept for the Company’s CDX bi-specific antibody product candidate if and when needed, including:
- completing Investigative New Drug (“IND”)-enabling pre-clinical studies that are needed in order to file an IND application requesting authorisation from the Food and Drug Administration (“FDA”) or other applicable regulatory body to initiate clinical trials and administer the Company’s CDX bi-specific antibody to humans;
- filing an IND; and
- completing Phase I/IIa clinical studies aimed at achieving clinical proof of concept and advancing the CDX bi-specific antibody toward later stages of clinical trials including Phase II and Phase III.
- Achieve clinical proof of concept for the HEMO-CAR-T, including:
- completing IND-enabling pre-clinical studies in collaboration with the University of Pennsylvania (“Penn”);
- filing an IND; and
- completing Phase I/IIa clinical studies aimed at achieving clinical proof of concept and advancing HEMO-CAR-T towards later stages of clinical trials including Phase II and Phase III.
- Achieve pre-clinical and clinical proof of concept for the Company’s cell therapy platform (referred to by the Company as “CBR”), including:
- completing the development and validation of CBR as a novel platform that allows the programming of immune cells to target either viral infections or certain types of cancer;
- completing IND-enabling pre-clinical studies of an undisclosed CBR-based product candidate;
- filing an IND; and
- completing Phase I/IIa clinical studies aimed at achieving clinical proof of concept and advancing the undisclosed CBR-based product candidate toward later stages of clinical trials including Phase II and Phase III.
- General working capital purposes
Current trading update
Work with a global international pharmaceutical company (“GlobalCo”) on the Company’s CDX antibody (“CDX”) as a clinical candidate, first announced on 14 May 2018, has entered its final phase. The term of the collaboration has been extended twice. The second extension announced on October 27, 2020 runs through the end of 2020. Both extensions were necessary to compensate for the slow down caused by the COVID-19 pandemic. The Company and GlobalCo continue to develop CDX toward clinical readiness and have nearly completed the manufacturability assessment and follow-up tests on the antibody.
Hemogenyx Pharmaceuticals and GlobalCo remain optimistic as to the outcome of these tests based on results to date and look forward to the completion of the scientific development work portion of the collaboration.
CAR-T Agreement with University of Pennsylvania
Hemogenyx Pharmaceuticals entered into a Sponsored Research Agreement (“Research Agreement”) with the University of Pennsylvania, as announced on August 11, 2020. The goal of the Research Agreement is to advance the Chimeric Antigen Receptor (“CAR”) T-cells (“HEMO-CAR-T”) developed by the Company toward clinical trials. The Research Agreement is envisaged as the first step of a larger program that aims to achieve clinical proof of concept for HEMO-CAR-T for the treatment of acute myeloid leukaemia (“AML”).
The Company is pleased with the progress made to date under the terms of the Research Agreement.
As announced on April 22, 2020, the Company commenced development of a novel treatment for patients suffering from COVID-19. Recognising that the field was saturated with companies competing to develop clinical grade neutralising antibodies to treat COVID-19, the Company demonstrated its expertise and nimbleness, deploying its ingenuity and existing technologies, including its Advanced peripheral blood Hematopoietic Chimera (“ApbHC”) (humanised mice), as well as its experience in programming immune cells, to develop a unique approach to combating viral infectious diseases more generally. As a result, the Company has developed a cell therapy platform, which it is calling CBR. The essence of CBR is the programming of immune cells using a novel type of modifiable synthetic receptor to destroy viral pathogens including SARS-CoV-2 which causes COVID-19. Not only can this type of synthetic receptor potentially combat viral pathogens, it can also potentially be modified to program immune cells to destroy malignant cells causing cancer. The novel synthetic receptor has no connection to, and does not resemble, any known or widely used Chimeric Antigen Receptors (CARs, e.g., HEMO-CAR-T), and the Directors are not aware of any direct competitor for this product candidate at this time. Hemogenyx Pharmaceuticals is engaged in pre-clinical validation of two CBR-based potential product candidates: one for the treatment of COVID-19, and the other for the treatment of an undisclosed type of cancer.
Further details of the Convertible Loan Notes
Mint Capital has conditionally agreed to subscribe for up to £60 million in aggregate principal amount of the Convertible Loan Notes pursuant to an agreement entered into today with the Company (the “Subscription Agreement”). The key terms of the Convertible Loan Notes include:
- A principal amount of up to £60,000,000, split into denominations of £50,000 per Convertible Loan Note. The Convertible Loan Notes will be subscribed for at par.
- The Convertible Loan Notes are to be issued in up to nine tranches. The first tranche of £12,000,000 in principal amount is expected to be issued immediately following satisfaction of the conditions in the Subscription Agreement (the “Initial Issue Date”). The subsequent eight tranches are issuable at the sole discretion of, and in the amounts determined by, the Company at respective intervals of 90 days after the Initial Issue Date. The aggregate maximum principal amount of the Convertible Loan Notes is limited to £60,000,000.
- No interest is payable on the Convertible Loan Notes.
- The Convertible Loan Notes are unsecured.
- Each tranche of Convertible Loan Notes issued is redeemable at par on the date falling 36 months after the relevant Issue Date (the “Maturity Date”).
- Each of the Convertible Loan Notes is convertible into ordinary shares of £0.01 (1 pence) each in the capital of the Company (“Ordinary Shares”) at any time during the period commencing on the fifth business day following the relevant Issue Date and ending at 5.00 p.m. London time on the business day immediately prior to the relevant Maturity Date (the “Conversion Period”).
- The price used for the conversion (the “Conversion Price”) will be equal to a 10 per cent. discount to the lesser of (i) 125 per cent. of the closing-bid price as reported by Bloomberg for one Ordinary Share one trading day before the relevant Issue Date (subject to adjustment to reflect any sub-division or consolidation of the Ordinary Shares) and (ii) the lowest closing bid-price as reported by Bloomberg for an Ordinary Share from the three consecutive trading days ending on the day prior to the date of service of the relevant conversion notice (or if such conversion notice is served after 4.35pm on any such date, then the three consecutive trading days ending on the day such conversion notice is served. In no event shall the Conversion Price be less than the nominal value of an Ordinary Share.
- A holder will not be permitted to submit a conversion notice in respect of the Convertible Loan Notes if the total Ordinary Shares held by the holder following the execution of such conversion notice would exceed 29.9 per cent. of the Company’s total Ordinary Shares.
- Subject to limited exceptions, the Convertible Loan Notes will not be transferable.
- Prior to conversion, the Convertible Loan Notes do not entitle the holder to any voting rights in the Company.
The Company has agreed to pay a fee of five per cent. of the aggregate principal value of the Convertible Loan Notes issued to the arranger for the Facility (the “Arranger”). Such fee shall be payable by the allotment and issue of new Ordinary Shares, subject to the Directors having the necessary shareholder authorities in place to issue such new Ordinary Shares and the issue of new Ordinary Shares not requiring the publication of a prospectus by the Company. If such fee cannot be satisfied by the allotment and issue of new Ordinary Shares, it shall be paid in cash.
Circular and notice of General Meeting
The issue of the Convertible Loan Notes is subject to, amongst other things, the Company obtaining shareholder approval to grant the Directors the necessary authorities to issue the Convertible Loan Notes. A circular will be sent to the Company’s shareholders in due course containing details of the Convertible Loan Notes and to convene a general meeting at which these approvals will be sought.
Other conditions to issue of the Convertible Loan Notes
The issue of Convertible Loan Notes on the Initial Issue Date is conditional on publication by the Company of a prospectus that has been approved by the FCA in respect of the admission of the Ordinary Shares to be issued on conversion of the Convertible Loan Notes to the standard segment of the Official List and to trading on the London Stock Exchange’s main market for listed securities. The issue of Convertible Loan Notes on any issue date after the Initial Issue Date is conditional on that prospectus remaining valid or a further prospectus having been published by the Company.
The issue of the Convertible Loan Notes is also conditional upon the Subscription Agreement having become unconditional in all respects in respect of that relevant tranche of Convertible Loan Notes.
For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, the person responsible for arranging for the release of this Announcement on behalf of the Company is Dr Vladislav Sandler, Chief Executive Officer & Co-Founder.
|Hemogenyx Pharmaceuticals plc||https://hemogenyx.com|
|Dr Vladislav Sandler, Chief Executive Officer & Co-Founderfirstname.lastname@example.org|
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|SP Angel Corporate Finance LLP||Tel: +44 (0)20 3470 0470|
|Matthew Johnson, Vadim Alexandre, Adam Cowl|
|Peterhouse Capital Limited||Tel: +44 (0)20 7469 0930|
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About Hemogenyx Pharmaceuticals plc
Hemogenyx Pharmaceuticals is a publicly traded company (LSE: HEMO) headquartered in London, with its US operating subsidiaries, Hemogenyx LLC and Immugenyx LLC, located in New York City at its state-of-the-art research facility.
The Company is a pre-clinical stage biopharmaceutical group developing new medicines and treatments to treat blood and autoimmune disease and to bring the curative power of bone marrow transplantation to a greater number of patients suffering from otherwise incurable life-threatening diseases. Hemogenyx Pharmaceuticals is developing several distinct and complementary product candidates, as well as a platform technology that it uses as an engine for novel product development.
For more than 50 years, bone marrow transplantation has been used to save the lives of patients suffering from blood diseases. The risks of toxicity and death that are associated with bone marrow transplantation, however, have meant that the procedure is restricted to use only as a last resort. The Company’s technology has the potential to enable many more patients suffering from devastating blood diseases such as leukaemia and lymphoma, as well as severe autoimmune diseases such as multiple sclerosis, aplastic anaemia and systemic lupus erythematosus (Lupus), to benefit from bone marrow transplantation.
This Announcement and the information contained in it is restricted and is not for release, publication or distribution, directly or indirectly, in whole or in part, in, into or from any jurisdiction in which the same would constitute a violation of the relevant laws or regulations of that jurisdiction. No public offering of Convertible Loan Notes is being made in any jurisdiction. The distribution of this Announcement and the offering of the Convertible Loan Notes in certain jurisdictions may be restricted by law. No action has been taken by the Company that would permit an offering of the Convertible Loan Notes or possession or distribution of this Announcement or any other offering or publicity material relating to such Convertible Loan Notes in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company to inform themselves about, and to observe, such restrictions.
There are matters set out within this Announcement that are forward-looking statements. Such statements are only predictions, and actual events or results may differ materially. For a discussion of important factors which could cause actual results to differ from forward-looking statements, refer to the Company’s Annual Report and Accounts for the period ended 31 December 2019. The Company does not undertake any obligation to update publicly, or revise, forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required. You should not place undue reliance on forward-looking statements, which speak only as of the date of this Announcement. No statement in this Announcement is or is intended to be a proﬁt forecast or proﬁt estimate or to imply that the earnings of the Company for the current or future ﬁnancial periods will necessarily match or exceed the historical or published earnings of the Company. The price of Ordinary Shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the Ordinary Shares.
It is not expected that any Convertible Loan Notes will be admitted to trading on any stock exchange. This Announcement is not an offering document, prospectus, prospectus equivalent document.
Neither the content of the Company’s website nor any links on the Company’s website is incorporated in, or forms part of, this Announcement.
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