07:00 Mon 12 Oct 2020
Scancell Hlds - Proposed investment by Redmile and Open Offer
NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 2014/596/EU ("MAR"). IN ADDITION, MARKET SOUNDINGS WERE TAKEN IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.
Scancell Holdings plc
("Scancell" or the "Company")
Proposed investment by funds managed by Redmile Group, LLC of up to
Open Offer to raise up to approximately
Notice of General Meeting
Scancell Holdings plc (AIM: SCLP), the developer of novel immunotherapies for the treatment of cancer and infectious disease, today announces that it has raised gross proceeds of approximately
The Company intends to use the proceeds of the Redmile Investment and the Open Offer (together the "Capital Raise") to extend the utility of the Company's ImmunoBody®, Moditope®, and AvidiMab™/tumour-associated glycans ("TaG") antibody products and platforms and to accelerate and broaden its development pipeline of new potential novel therapies and increase the funding available for the Company's COVID-19 vaccine.
The Capital Raise consists of the following:
· a subscription by the Redmile Funds for 93,071,170 new ordinary shares in the Company (the "Subscription Shares") for approximately
· a subscription by the Redmile Funds for convertible loan notes with an aggregate principal amount of approximately
· an open offer to Qualifying Shareholders of up to approximately
The issue of the New Convertible Loan Notes and the Open Offer are subject to the Company obtaining shareholder approval to grant the Directors the necessary authorities to issue the New Convertible Loan Notes and the Open
Use of proceeds
Scancell is developing novel immunotherapies for the treatment of cancer based on its technology platforms, ImmunoBody®, Moditope® and AvidiMabTM, with four products in multiple cancer indications and a vaccine in development for COVID-19.
In August, the Company completed a fundraising of
The Capital Raise will provide the Company with significant additional balance sheet strength and will allow the Company to extend the utility of the Company's ImmunoBody®, Moditope® and AvidiMab™/TaG antibody products and platforms to accelerate and broaden its development pipeline of new potential novel therapies. In particular, proceeds from the Capital Raise are expected to be used to:
· Initiate and advance new and existing ImmunoBody® and Moditope® programmes, such as Modi-2, which is currently in pre-clinical development
· Expand the Company's resources and capabilities in development and clinical operations to expedite programmes to the clinic and broaden their potential clinical utility
· Build on existing antibody expertise to further advance the preclinical development of the TaG antibodies, including as antibody-drug conjugates ("ADC")
· Supplement the Innovate
· Broaden the Company's intellectual property portfolio.
This additional capital from the Capital Raise will also provide the Company with flexibility regarding the development plans for its existing therapies to ensure both optimal development and commercialisation strategies can be pursued and to limit the potential impact on the Company of economic pressures caused by COVID-19 on the Company's partners or potential future partners. Cancer Research UK (CRUK) are currently funding and sponsoring a Phase 1/2 trial with the Company's SCIB2 ImmunoBody® therapy and immune checkpoint inhibitor to target solid tumours. However in light of severe funding pressures, CRUK are currently reviewing their ability to continue to support their broad range of programmes.
As at
Programme and current trading update
Covid-19 vaccine
The Company recently announced that it has entered into a collaboration with Cobra Biologics to manufacture the plasmid DNA needed to generate a DNA vaccine against SARS-CoV-2. This is a crucial development stage in the production of Scancell's COVID- 19 vaccine for use in the Phase 1 clinical trial, COVIDITY, which is expected to commence in 2021.
SCIB-1
A Phase 2 clinical trial, designed to assess whether the addition of SCIB1 to the checkpoint inhibitor pembrolizumab (Keytruda) will result in an improvement in the tumour response rate, progression-free survival and overall survival in 25 patients with advanced melanoma, was initiated following regulatory approvals. The Company is actively engaged with four clinical sites in the
Modi-1
Progress towards initiating the Modi-1 Phase 1/2 clinical trial has continued with successful completion of GMP drug substance manufacture for all three of the conjugates that comprise the Modi-1 product. Successful progression to GMP drug product manufacture and formulation of clinical supplies for two of the peptide components has been completed in Q3 2020, with the third component anticipated to be manufactured in Q4 2020.
The Company continues to progress the necessary processes and documentation required for regulatory submission to start the planned clinical study in the
Avidimab™ platform and the TaG antibodies update
With the additional funds available from the Capital Raise, the Company intends to add further value to both the Avidimab™ platform and the TaG antibodies before concluding any licensing deals.
Patents
Two new patents have been filed in 2020: A modified Fc vaccine patent extending the life of the ImmunoBody® platform and providing new coverage for infectious disease vaccines was filed. In addition, a patent for a new Moditope® citrullination target, nucleophosmin, was also filed.
Further details of the Subscription
The allotment and issue of the Subscription Shares to the Redmile Funds will be made pursuant to the existing shareholder authorities granted to the Company at its Annual General Meeting held on
Application will be made for the Subscription Shares to be admitted to trading on AIM and it is expected that admission will become effective on or around Tuesday 14th October 2020 ("First Admission"). The Subscription is conditional upon, inter alia:
· the Redmile Subscription Agreement having become unconditional in all respects in respect of the Subscription; and
· First Admission becoming effective by no later than
The Subscription is not conditional on the issue of the New Convertible Loan Notes or completion of the Open Offer.
Further details of the New Convertible Loan Notes
The Redmile Funds have conditionally agreed to subscribe for approximately £17.9 million in principal amount of New Convertible Loan Notes pursuant to the Redmile Subscription Agreement.
The key terms of the New Convertible Loan Notes include:
· A principal amount of
· Interest at the rate of 3 per cent. per annum will be payable on the New Convertible Loan Notes. This can be paid in cash or Ordinary Shares at the election of the Company upon payment, unless this would result in noteholders holding shares carrying 30% or more of the voting rights of the Company, in which case the consent of 75% of noteholders (by value) is required.
· The New Convertible Loan Notes will be required to be redeemed on the redemption date which will be two years after the date of execution of the instrument creating the New Convertible Loan Notes (the "Redemption Date").
· On the Redemption Date, the New Convertible Loan Notes are convertible into Ordinary Shares at a conversion price of
· Subject to limited exceptions, the New Convertible Loan Notes will not be transferable.
· Prior to conversion, the New Convertible Loan Notes do not entitle the holder to any voting rights in the Company.
The issue of the New Convertible Loan Notes and the Open Offer are subject to the Company obtaining shareholder approval to grant the Directors the necessary authorities to issue the New Convertible Loan Notes and the Open
The issue of the New Convertible Loan Notes is also conditional upon the Redmile Subscription Agreement having become unconditional in all respects and the Subscription having completed in accordance with the terms of the Redmile Subscription Agreement. The issue of the New Convertible Loan Notes is not conditional on completion of the Open Offer.
Further details on the Open Offer
As noted above, in order to provide Qualifying Shareholders with an opportunity to participate in the Capital Raise at the Issue Price, the Company proposes to make an Open Offer to all Qualifying Shareholders to raise gross proceeds of up to approximately
Subject to the Open
The Open Offer is conditional on First Admission but is not conditional on the issue of the New Convertible Loan Notes. The other principal conditions to the Open Offer are:
· the passing (without amendment) of the Resolutions relating to the Open Offer at the General Meeting;
· the Open Offer Agreement becoming or being declared unconditional in all respects and not terminated in accordance with its terms prior to Second Admission; and
· Second Admission becoming effective by no later than
Open Offer Basic Entitlement
Qualifying Shareholders (other than, subject to certain exemptions, Excluded Overseas Shareholders) have the opportunity under the Open Offer to subscribe for Open
1 Open Offer Share for every 27 Existing Ordinary Shares held by Qualifying Shareholders on the Record Date.
Shareholders subscribing for their full Open Offer Entitlements will also be invited to apply for additional Open
Open Offer Excess Application
The Open Offer is structured so as to allow Qualifying Shareholders to subscribe for Open
The Open Offer is not a rights issue. Qualifying CREST Shareholders should note that although the Basic Entitlements and Excess CREST Open Offer Entitlements will be admitted to CREST and be enabled for settlement, they will not be tradable and applications in respect of the Basic Entitlements and Excess CREST Open Offer Entitlements may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by Euroclear's Claims Processing Unit. Qualifying Non-CREST Shareholders should note that the Application Form is not a negotiable document and cannot be traded. Qualifying Shareholders who do not apply to take up their Basic Entitlement will have no rights under the Open Offer or receive any proceeds from it. If valid acceptances are not received in respect of all Basic Entitlements under the Open Offer, unallocated Open
Application will be made for the Basic Entitlements and Excess CREST Open Offer Entitlements of Qualifying CREST Shareholders to be admitted to CREST. It is expected that such Basic Entitlements and Excess CREST Open Offer Entitlements will be admitted to CREST on 14th October 2020.
As noted above, a circular to Shareholders containing full details of the Open Offer and convening the General Meeting is expected to be dispatched on or around Tuesday
Redmile shareholding
Upon First Admission, the Redmile Funds will be interested in a total of 183,980,260 Ordinary Shares (representing approximately 25.5 per cent. of the Ordinary Shares in issue upon First Admission) and Existing Convertible Loan Notes of principal amount of
Subject to completion of the Subscription, the issue of the New Convertible Loan Notes described in this Announcement, conversion of all Existing Convertible Loan Notes held by the Redmile Funds at the adjusted conversion price referred to above, conversion of all New Convertible Loan Notes and assuming no take up of the Open Offer, the maximum potential holding of the Redmile Funds in the Company would be approximately 43 per cent (assuming the Company does not issue any other Ordinary Shares from the date of this Announcement). However, the ability of the Redmile Funds to increase its holding in the Company to 30 per cent. or more of the voting rights of the Company (through conversion of convertible loan notes instruments held or other acquisition of Ordinary Shares) is subject to the constraints of the Takeover Code, including those set out below.
Takeover Code
Under the Takeover Code, if an acquisition of Ordinary Shares or interests therein were to increase the aggregate holding of the acquirer and its concert parties to interests in shares carrying 30 per cent. or more of the voting rights in the Company, the acquirer and, depending on circumstances, its concert parties would be required (except with the consent of the Panel) to make a cash offer for the outstanding shares in the Company at a price not less than the highest price paid for interests in shares by the acquirer or its concert parties during the previous 12 months.
This requirement would also be triggered by any acquisition of new ordinary shares and/or interest therein by a person holding (together with its concert parties) ordinary shares carrying between 30 and 50 per cent. of the voting rights in the Company if the effect of such acquisition was to increase that person's percentage of the total voting rights of the Company.
Related Party Transaction
Vulpes, a substantial shareholder of the Company (as defined by the AIM Rules) intends to subscribe for Open
Redmile Biopharma Investments II, L.P. and Redco I, L.P. (both funds managed by Redmile Group, LLC) are together a substantial shareholder of the Company (as defined by the AIM Rules). The Redmile Funds have agreed to subscribe for 93,071,170 Subscription Shares at the Issue Price in addition to the New Convertible Loan Notes with a principal value of approximately £17.9 million. The participation by the Redmile Funds in the Capital Raise constitutes a related party transaction for the purposes of the AIM Rules. The independent Directors for the purpose of the Capital Raise, (being all of the Directors except
Total Voting Rights
Following First Admission, the Company will have 722,198,262 Ordinary Shares in issue. The Company does not currently hold any shares in treasury. Therefore, the total number of voting rights in the Company following First Admission will be 722,198,262. Shareholders may use this figure 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, the issued share capital of the Company, under the FCA's Disclosure Guidance and Transparency Rules.
Capitalised terms not otherwise defined in the text of this Announcement are defined in the Appendix.
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
For further information, please contact:
Scancell Holdings plc Dr Dr |
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+44 (0) 20 3727 1000 |
Panmure Gordon (UK) Limited |
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+44 (0) 20 7886 2500 |
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+44 (0) 20 3727 1000 |
Important Notice
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
This Announcement has been issued by, and is the sole responsibility, of the Company. No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Panmure Gordon or by any of its affiliates, directors, officers, employees, advisers or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed. Panmure Gordon has not authorised the contents of, or any part of, this Announcement.
Panmure Gordon, which is authorised by the FCA, is acting exclusively for the Company and no-one else in connection with the Capital Raise and will not regard any other person as a client in relation to the Capital Raise and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Capital Raise or any other matter referred to herein. Its responsibilities as nominated adviser and broker to the Company are owed to the London Stock Exchange and the Company and not to any other person including, without limitation, in respect of any decision to acquire New Ordinary Shares or New Convertible Loan Notes in reliance on any part of this Announcement.
No public offering of New Ordinary Shares or New Convertible Loan Notes is being made in the
The information in this Announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions.
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
It is expected that the New Ordinary Shares in the Company to be issued pursuant to the Capital Raise will not be admitted to trading on any stock exchange other than to trading on AIM, a market operated by the London Stock Exchange. It is not expected that any New Convertible Loan Notes will be admitted to trading on any stock exchange. This Announcement is not an offering document, prospectus, prospectus equivalent document or AIM admission document. It is expected that no offering document, prospectus, prospectus equivalent document or AIM admission document will be required in connection with the Capital Raise and no such document has been or will be prepared or submitted to be approved by the FCA or submitted to the London Stock Exchange in relation to the Capital Raise.
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.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Record date for entitlement under the Open Offer |
Close of business on 9 October 2020 |
Publication and posting of the Circular, the Form of Proxy and (to Qualifying Non-CREST Shareholders only) the Application Form |
13 October 2020 |
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Open Offer Entitlements credited to CREST Stock Accounts of Qualifying CREST Holders |
14 October 2020 |
Admission and commencement of dealings in the Subscription Shares |
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General Meeting Announcement of result of Open Offer and result of General Meeting |
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Admission and commencement of dealings in the Open |
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Despatch of definitive share certificates for Open |
Within 14 days of allotment |
If any of the details contained in the timetable above should change, the revised times and dates will be notified by means of an announcement through a Regulatory Information Service.
Certain of the events in the above timetable are conditional upon, amongst other things, the approval of the Resolutions to be proposed at the General Meeting.
All references to times and dates are to times and dates in
APPENDIX
DEFINITIONS
The following definitions apply throughout this Announcement unless the context requires otherwise:
'AIM' means the market of that name operated by London Stock Exchange;
'AIM Rules' means the provisions of the London Stock Exchange's AIM Rules for Companies as amended from time to time governing, amongst other things, admission to AIM and the continuing obligations of AIM companies;
'Announcement' means this announcement (including the appendix to this Announcement);
'Application Form' means the personalised application form which will accompany the Circular on which Qualifying Non-CREST Shareholders may apply for Open
'Articles' means the articles of association of the Company;
'Basic Entitlements' means 1 Open Offer Share for every 27 Existing Ordinary Shares held by Qualifying Shareholders on the Record Date;
'Capital Raise' means the Redmile Investment and the Open Offer;
'Circular' means the circular to be issued by the Company to Qualifying Shareholders and to Excluded Overseas Shareholders who have notified an address in the
'Company' means Scancell Holdings plc, registered in
'CREST' means the relevant system (as defined in the CREST Regulations) in respect of which Euroclear UK & Ireland Limited is the Operator (as defined in the CREST Regulations);
'CREST Regulations' means the Uncertificated Securities Regulations 2001 (SI 2001/3755) as amended from time to time;
'CREST Stock Account' means an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited;
'Directors' or 'Board' means the directors of the Company as at the date of this Announcement;
'Excess Application Facility' means the arrangement pursuant to which Qualifying Shareholders may apply for additional Open
'Excess CREST Open Offer Entitlements' in respect of each Qualifying CREST Shareholder, their entitlement (in addition to their Open Offer Entitlement) to apply for Open
'Excess Shares' means Open
'Existing Convertible Loan Notes' means the convertible loan notes with a principal amount of
'Existing Ordinary Shares' means the Ordinary Shares in issue at the date of this announcement;
'Excluded Overseas Shareholders' means Shareholders with registered addresses in or who are resident in a Restricted Jurisdiction;
'FCA' means the Financial Conduct Authority of the United Kingdom;
'Final Date' means
'Form of Proxy' means the form of proxy for use in respect of the General Meeting to accompany the Circular;
'General Meeting' means the general meeting of the Company to be held on
'Group' means the Company and its subsidiary undertakings from time to time;
'Issue Price' means
'London Stock Exchange' means London Stock Exchange plc;
'New Convertible Loan Notes' means the unsecured convertible loan notes issued in denominations or multiples of
'New Ordinary Shares' means the Subscription Shares and the Open
'Open Offer' means the conditional invitation to Qualifying Shareholders to apply to subscribe for Open
'Open Offer Agreement' means the agreement dated the date of this Announcement between the Company and Panmure Gordon in respect of the Open Offer;
'Open Offer Entitlement' means the entitlement of Qualifying Shareholders to subscribe for Open
'Open
'Ordinary Shares' means the ordinary shares of nominal value
'Overseas Shareholders' means Shareholders with registered addresses outside the
'Panel' means the Panel on Takeovers and Mergers;
'Panmure Gordon' means Panmure Gordon (UK) Limited, registered in
'Qualifying CREST Shareholders' means Qualifying Shareholders holding Ordinary Shares in uncertificated form in CREST at the Record Date;
'Qualifying Non-CREST Shareholders' means Qualifying Shareholders holding Ordinary Shares in certificated form at the Record Date;
'Qualifying Shareholders' means holders of Ordinary Shares on the register of members of the Company at the Record Date with the exclusion of Overseas Shareholders with a registered address or who are resident in any Restricted Jurisdiction;
'Record Date' means close of business on
'Redemption Date' means the redemption date for the New Convertible Loan Notes, which will be two years after the date of execution of the instrument creating the New Convertible Loan Notes;
'Redmile Investment' means Redmile's agreement to subscribe for 93,071,170 Subscription Shares and approximately
'Redmile Subscription Agreement' means the subscription agreement entered into between the Company and the Redmile Funds dated the date of this Announcement pursuant to which the Redmile Funds have conditionally agreed to subscribe for the Subscription Shares and the New Convertible Loan Notes;
'Resolutions' means resolutions to be proposed at the General Meeting;
'Restricted Jurisdiction' means each and any of
'Securities Act' means the US Securities Act of 1933, as amended;
'Shareholders' means holders of Ordinary Shares;
'Subscription' means the subscription by the Redmile Funds for the Subscription Shares pursuant to the terms of the Redmile Subscription Agreement;
'Subscription Shares' means 93,071,170 new Ordinary Shares to be subscribed for by the Redmile Funds;
'Takeover Code' means the City Code on Takeovers and Mergers published by the Panel;
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'Vulpes' means Vulpes Life Sciences Fund.
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