Oxford BioDynamics Plc (LON:OBD) announced today that it has entered into a Co-operation Agreement with GL Capital Group to address the growing demand for healthcare and personalised medicine in China.
Leading Chinese Healthcare Investment Group Takes Stake in OBD
• Strategic partnership with GL Capital Group (“GL”), a Greater China healthcare-focused investment management group, with c.$ 1.4 billion under management
• GL becomes a 5% investor in OBD through subscription for c.£9.75 million of new shares in the Company. OBD is GL’s first investment in Europe
• Partnership will enable OBD to access the large market for personalised healthcare in China
Christian Hoyer Millar, Chief Executive Officer of Oxford BioDynamics, commented: “We are delighted to announce this agreement with GL Capital Group, which builds on our strategy to increase our global reach. We identified Asia as a core focus for international expansion and this co-operation agreement will allow us to address the many opportunities that we see in this region. We have been impressed by the depth of scientific and commercial understanding GL have shown in our interactions to date, and we are convinced that they are the right strategic partner as we begin to engage with the important Chinese market. It is an honour for OBD that they have chosen to make us their first major European investment. The funds will be utilised to further drive development of OBD’s EpiSwitch™ technology globally.”
Jeffrey Li, Founder and Chief Executive Officer of GL Capital Group, added: “It is a great pleasure to begin this strategic partnership with OBD. GL’s investment strategy is founded on identifying market-leading companies with innovative technologies or products that have a robust scientific basis, strong competitive barriers and promising growth potential. Following extensive due diligence we are delighted to be making an investment in OBD, our first investment in an innovative European biotechnology company. We have been following OBD’s progress for a considerable period of time and clearly see the Company at the forefront of personalised medicine on a global basis. I am excited at this first step in our relationship as we begin to work together on the many potential commercial opportunities we see in mainland China.”
Strategic Partnership
Oxford BioDynamics has appointed GL to act as the Company’s lead mainland Chinese business development partner. China’s healthcare market is expected to grow to over $1 trillion by 2020, driven by demographic changes and increasing access to innovative therapies.1 In 2016, China announced the use of data in medicine to be a national priority, as it increasingly exploits new technologies in healthcare.2
The Asia Pacific market is expected to be the fastest growing market for companion diagnostics.3 In particular, China, with its increasing healthcare expenditure, offers a considerable potential opportunity for OBD to deploy its proprietary EpiSwitch™ platform technology, and to assist in clinical decisions and actionable patient stratifications with strategic applications of its epigenetic biomarkers.
GL will apply its extensive industry network and local knowledge to identify, screen and recommend suitable business partners in China and these partners will benefit from access to OBD’s next generation biomarkers.
GL has developed a reputation as the partner of choice for healthcare companies and has demonstrated a strong capability to add value to its portfolio investments. With $1.4 billion assets under management and over 40 portfolio companies, GL is a leading and highly respected investment partner in the healthcare sector in China.
Under the terms of the Co-operation Agreement GL has been granted the right to appoint a director to the Company and it is anticipated that a member of GL’s executive management team will join OBD’s Board in a non-executive capacity. Furthermore, GL has been granted the right of first refusal to participate and invest in OBD’s commercial operation and business in mainland China.
Subscription
GL has entered into a subscription agreement to subscribe for 4,688,000 ordinary shares of 1p each in the Company at a price of 208p per new Ordinary Share (the “Subscription”) raising gross proceeds for the Company of c.£9.75m. The Subscription Price was set at the volume weighted daily average closing price of the 90 days preceding 8 August 2018, being the date that the principal commercial terms were agreed.
The net proceeds of the Subscription will be used to:
· Expand the commercialisation of the Company’s platform technology worldwide.
· Further build the infrastructure of the Company both in the UK and abroad.
· Develop further intellectual property related to Chromosome Conformation Signatures.
· Expand both the intellectual property coverage and commercial opportunities in the health and wellness sector.
The Subscription Shares will rank pari passu in all respects with the Company’s existing Ordinary Shares and will represent c.5.08% of the Company’s enlarged issued share capital. Application has been made for the Subscription Shares to be admitted to AIM and it is expected that admission will take place on 28 August 2018.
Following Admission, the Company’s total issued and voting share capital will comprise 92,201,306 Ordinary Shares. This figure 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, securities of the Company.
