Issue of Equity
Thursday March 16, 2023
Thursday March 16, 2023
THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) (THIS “ANNOUNCEMENT”) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
24 February 2023
Destiny Pharma plc
Fundraising to raise up to £8 million
Destiny Pharma plc (AIM: DEST) (the “Company” or “Destiny Pharma”), a clinical stage innovative biotechnology company focused on the development of novel medicines that can prevent life-threatening infections, today announces a conditional fundraising of up to approximately £8 million (before expenses) comprising a Placing, Subscription and an Open Offer (each as defined below). The net proceeds of the Fundraising will allow the Company to complete final Phase 3 clinical trial preparation for NTCD-M3, including clinical trial material manufacturing; progress XF-73 Nasal CMC manufacturing and Phase 3 preparation; to further progress its preclinical projects; and to provide general working capital to strengthen the balance sheet, which is a condition of the Collaboration and Co-development agreement with Sebela Pharmaceuticals as announced earlier today.
Certain defined terms used in this Announcement are set out in Appendix III to this Announcement.
The Company has placed new ordinary shares of one pence each (“Ordinary Shares”) in the capital of the Company (the “Placing Shares”) at a price of 35 pence per Placing Share (the “Issue Price”) to raise approximately £7 million (before expenses), (the “Placing”). Of the Placing Shares, 14,285,714 new ordinary shares are being allotted out of existing share authorities and will be admitted on 1 March 2023 the remaining 5,714,286 new ordinary shares will be subject to approval by Shareholders of the requisite authorities at the General Meeting on 16 March 2023.
The Company also announces a conditional subscription by certain directors of the Company (the “Directors” or the “Board”) of an aggregate 71,428 new Ordinary Shares (the “Subscription Shares”) at the Issue Price to raise £25,000 (before expenses), (the “Subscription”).
In addition to the Placing and the Subscription, Qualifying Shareholders will be given the opportunity to subscribe for an aggregate of up to 2,938,284 new Ordinary Shares (the “Open Offer Shares” and, together with the Placing Shares and the Subscription Shares, the “New Shares”) at the Issue Price through an open offer to raise up to approximately £1 million (before expenses), (the “Open Offer”, and together with the Placing and the Subscription, the “Fundraising”).
It is intended that the Circular to Shareholders will be posted on 28 February 2023.
· Placing and Subscription with new and existing investors to raise £7.0 million (before expenses) through the issue of 20,000,000 new Ordinary Shares at the Issue Price.
· Open Offer at the Issue Price to raise up to a further £1.0 million (before expenses).
· The First Placing is a condition to the completion of the Collaboration and Co-Development agreement with Sebela Pharmaceuticals, also announced today, which the Board believes significantly de-risks the development and potential commercialisation of NTCD-M3 without the Company being required to contribute to further clinical development funding. The agreement with Sebela Pharmaceuticals, which could be worth up to a maximum of US$570m to Destiny Pharma, includes initial upfront payment, development and commercialisation milestone payments, as well double digit royalties. The Company can also potentially agree additional partnering arrangements for territories in Europe, UK and the rest of the world (excluding China regional rights already held by China Medical Systems).
· The net proceeds of the Fundraising will allow the Company to complete final Phase 3 clinical trial preparation for NTCD-M3, Destiny pharma’s lead asset for the prevention of Clostridioides difficile infection (CDI) recurrence, including clinical trial material manufacturing; progress XF-73 CMC manufacturing and Phase 3 preparation; to further progress preclinical projects; and provide general working capital to strengthen the balance sheet, a condition of the Collaboration and Co-development agreement with Sebela Pharmaceuticals detailed below. The net proceeds of the placing will fund Destiny Pharma through to late 2024.
· The New Shares, assuming full take-up of the Open Offer, will represent approximately 24 per cent. of the Enlarged Share Capital following Admission.
· The Issue Price represents a discount of approximately 27 per cent. to the closing mid-market price of 48 pence per existing Ordinary Share on 23 February 2023, being the latest practicable date prior to this Announcement.
· Certain of the Directors have conditionally agreed to subscribe for, in aggregate, 71,428 new Ordinary Shares in the Subscription.
· The Second Placing is conditional, inter alia, upon a general meeting being held to approve the resolutions (the “Resolutions”) required to implement the Second Placing. The general meeting is expected to be held at 11.00 a.m. at the offices of Covington & Burling LLP, 22 Bishopsgate, London, EC2N 4BQ on 16 March 2023 (the “General Meeting”). A detailed timetable of events is set out in Appendix I of this Announcement. The First Placing of £5 million is unconditional.
Neil Clark, CEO of the Company commented:
“This agreement is a landmark transaction for Destiny Pharma, as Sebela Pharmaceuticals is not only planning to finance all future clinical development and commercialisation costs of NTCD-M3 in the US, but also pay success based development and commercialisation milestone payments, as well double-digit royalties. The agreement could be worth up to a maximum of US$570m plus royalty income, which represents a tremendous potential return on investment in a little over two years since acquisition. We not only retain the majority of worldwide rights to NTCD-M3 outside the US, but also have a portfolio of other very valuable, novel drugs candidates in our portfolio, including our XF-73 Nasal gel, which has completed a positive Phase 2b clinical trial and is heading towards the final Phase 3 clinical studies. This fundraising will put us in a robust position to continue to work on developing and commercialising these assets.
“We are grateful for the continued support of existing shareholders and are delighted to welcome a large number of new shareholders onto our register in what was an upsized and oversubscribed Placing. We look forward to a year of further progress and now have an excellent partner in Sebela and a strong balance sheet to complete the development of NTCD-M3, which has a substantial market opportunity and the potential to add significant value to the Company.”
finnCap Limited (“finnCap”) and Shore Capital Stockbrokers Limited (“Shore Capital”) acted as Joint Bookrunners in connection with the Placing.
The Company intends to publish and send a shareholder circular and notice of General Meeting (the “Circular”) to Shareholders in connection with the Resolutions and the Open Offer on 28 February 2023. The Circular will be available from the Company’s website (www.destinypharma.com) once published.
The person responsible for arranging the release of this Announcement on behalf of the Company is Shaun Claydon, Chief Financial Officer and Company Secretary of the Company.
For further information, please contact:
Destiny Pharma plc
Neil Clark, CEO
Shaun Claydon, CFO
+44 (0)1273 704 440
finnCap Ltd (Nominated Adviser, Joint Broker and Joint Bookrunner)
Geoff Nash / Abigail Kelly / George Dollemore, Corporate Finance
Alice Lane / Nigel Birks / Harriet Ward, ECM
+44 (0)20 7220 0500
Shore Capital (Joint Broker and Joint Bookrunner)
Daniel Bush / James Thomas / Lucy Bowden
+44 (0) 207 408 4090
Optimum Strategic Communications
Mary Clark / Nick Bastin / Jonathan Edwards / Eleanor Cooper
+44 (0) 7931 500066
MC Services AG (Placing Agent)
Anne Hennecke / Andreas Burckhardt
Stern IR – US
About Destiny Pharma
Destiny Pharma is a clinical stage, innovative biotechnology company focused on the development of novel medicines that can prevent life-threatening infections. Its pipeline has novel microbiome-based biotherapeutics and XF drug clinical assets including NTCD-M3, a Phase 3 ready treatment for the prevention of C. difficile infection (CDI) recurrence which is the leading cause of hospital acquired infection in the US and also XF-73 nasal gel, which has completed a positive Phase 2b clinical trial targeting the prevention of post-surgical staphylococcal hospital infections including MRSA. It is also co-developing SPOR-COV, a novel, biotherapeutic product for the prevention of COVID-19 and other viral respiratory infections and has earlier grant funded XF drug research projects.
For further information on the Company, please visit https://www.destinypharma.com
This Announcement should be read in its entirety. In particular, you should read and understand the information provided in the “Important Notices” section of this Announcement. Please click here for full press release Issue of Equity