ImmuPharma PLC (LSE:IMM) the specialist drug discovery and development company, has told DirectorsTalk about a proposed conditional fund raise of not less than £7.5 million. This includes a proposed conditional non-pre-emptive placing of not less than 11,824,877 Placing Shares at a price of 26 pence per Placing Share to raise approximately not less than £3.1 million, and the proposed entry by the Company into a subscription agreement with Lanstead Capital L.P., an institutional investor, together with a related sharing agreement, to raise approximately £4.4 million.
Highlights
· Proposed conditional placing of not less than 11,824,877 new ordinary shares of 10 pence each in the Company (“Placing Shares”) with existing and new institutional and other investors at a price of 26 pence per Placing Share (“Placing Price”) to raise gross proceeds of approximately not less than £3.1 million, representing approximately not less than 13.3 per cent. of the Company’s existing issued share capital (the “Placing”);
· Placing Price represents a discount of 10.3 per cent. to the closing mid-market price on 4 February 2016, being the last practicable date prior to the date of this announcement;
· Proposed conditional subscription of 17,021,277 new ordinary shares of 10 pence each in the Company (the “Subscription Shares”) by Lanstead Capital L.P. (“Lanstead”) at an issue price of 26 pence per Subscription Share (the “Issue Price”) to raise gross proceeds of approximately £4.4 million, representing approximately 19.2 per cent. of the Company’s existing issued share capital (the “Subscription”).
· 15 per cent. of the £4.43 million gross proceeds of the Subscription, being c.£0.66 million, will be retained by the Company and the balance of £3.76 million will be pledged by the Company pursuant to a sharing agreement with Lanstead (the “Sharing Agreement”). The Sharing Agreement, details of which are set out below, entitle the Company to receive back those proceeds on a pro rata monthly basis over a period of 18 months, subject to adjustment upwards or downwards each month depending on the Company’s share price at the time. The Sharing Agreement provides the opportunity for the Company to benefit from positive future share price performance.
· The Company has also agreed to issue to Lanstead 851,064 Ordinary Shares (the “Value Payment Shares”) pursuant to the Sharing Agreement.
· The total gross proceeds of the Placing and the Subscription receivable by the Company, expected to be approximately not less than £7.5 million, subject to the Sharing Agreement, will be used primarily to fund:
o the pivotal Phase III clinical trial of Lupuzor™, the Company’s lead programme for the potential breakthrough compound for Lupus, the life threatening auto immune disease; and
o the Company’s working capital requirements through to 2018.
· Certain Directors of the Company and Simbec-Orion, the international CRO conducting the Lupuzor™ Phase III trial, intend to participate in the Placing.
The Placing is conditional, inter alia, on the approval of the resolutions by shareholders of the Company at a general meeting to be held on or around 10 a.m. on 22 February 2016 at the offices of Bircham Dyson Bell LLP, 50 Broadway, London SW1H 0BL (the “General Meeting”), and on the admission of the Placing Shares to trading on AIM.
The Placing is being conducted through an accelerated bookbuild (the “Bookbuild”) which will be launched immediately following this Announcement. Members of the public are not eligible to take part in the Placing.
The Company has applied to HM Revenue and Customs to receive advance assurance that it is a qualifying holding for the purposes of the Venture Capital Trust rules (“VCT Advance Assurance”) and / or a qualifying company for the purposes of the Enterprise Investment Scheme (“EIS Advance Assurance”). However, there can be no certainty that either VCT Advance Assurance or EIS Advance Assurance will be granted by H M Revenue and Customs.
The Subscription, the Sharing Agreement and the issue of the Value Payment Shares are conditional, inter alia, on the approval of the resolutions by shareholders of the Company at the General Meeting, and on the admission of the Subscription Shares and Value Payment Shares to trading on AIM
A circular to Shareholders, including a notice convening the General Meeting, will be despatched shortly and will also be available on the Company’s website shortly at http://www.immupharma.org/.
Panmure Gordon (UK) Limited (“Panmure Gordon”) is acting as Financial Adviser, Nominated Adviser and joint Corporate Broker in respect of the Placing.
Tim McCarthy, Chairman of ImmuPharma, commented: “ImmuPharma is in an enviable position of owning a potential blockbuster drug in Lupuzor™, which has been awarded the ‘gold standard’ by the FDA of a special protocol assessment and fast track status due to its strong efficacy and safety profile. With the pivotal Phase III trial having commenced, the proceeds of the Placing and Subscription provide us with the necessary funding to complete this trial.
We are confident that throughout this year and the next, further value enhancing news-flow will be announced on the progress of our Lupuzor™ Phase III trial with top line results at the end of 2017, as well providing updates on the development of our earlier stage pipeline. We look forward to updating the market on the successful completion of the Placing in the near future.”
