Active Biotech strengthens its financial position: rights issue of approximately SEK 225 millionNovember 5, 2014 08:31 (CET)
On 4 November 2014, the board of directors of Active Biotech AB (publ) ("Active Biotech" or the "Company") resolved, subject to approval by the shareholders' meeting, on a rights issue with pre-emptive rights of approximately SEK 225 million, at full subscription. The rights issue strengthens Active Biotech's financial position and its position in discussions with existing and new potential new partners.
- The shareholders of the Company have pre-emptive rights to subscribe for the new shares, whereby five existing shares entitle the subscription of one new share.
- The subscription price is SEK 15 per share. Subscription shall be made during the period
8 - 22 December 2014.
- Active Biotech's largest shareholders, with total holdings of approximately 49 per cent of the Company's shares and votes, have undertaken to subscribe for their respective pre-emptive parts of the rights issue.
- Extraordinary shareholders' meeting to be held on 1 December 2014 for approval of the board's resolution.
Background and reasons
The Board of Directors of Active Biotech has decided to focus the company's resources on the two projects in late clinical phase and on new proprietary molecules discovered in-house. After completed clinical studies, no further scientific activities will be performed with respect to the projects ANYARA and paquinimod. The two projects in late clinical phase are both out-licensed. However, the company has retained all the commercial rights for tasquinimod in North and South America as well as Japan for out-licensing once Phase III results have been obtained.
The laquinimod project is focused on the treatment of neurodegenerative diseases. The three diseases in which clinical development is ongoing are relapsing remitting multiple sclerosis (RRMS), primary progressive multiple sclerosis (PPMS) and Huntington's disease. Study results are expected in the first six months of 2016 which, if positive, will be considered pivotal. The project has undergone, and is currently undergoing, a highly comprehensive clinical development program, and completed and ongoing investments in the project by Active Biotech and its partner are estimated to total about SEK 5 billion.
The tasquinimod project is being developed for the treatment of cancer, primarily metastatic Castrate Resistant Prostate Cancer (mCRPC). Study results are expected in the first six months of 2015 which, if positive, will be considered pivotal. Completed and ongoing investments in the project by Active Biotech and its partner are estimated to total about SEK 2 billion.
In addition, Active Biotech is pursuing a preclinical project, ISI. This project is based on preclinical studies and has potential treatment applications in both degenerative diseases and cancer. The initial selection of a candidate drug (CD) for cancer therapy is planned for 2015.
The rights issue at hand will provide Active Biotech with the financial stability required pending the outcome of the ongoing Phase III studies, where both projects have significant commercial potential. If the pivotal results for tasquinimod are obtained in the first six months of 2015, the Company is of the opinion that this financial stability will be required to maximize the project's commercial value in negotiations with potential partners for the Company's own territories.
The Company's current liquidity and this proposed new share issue, combined with revenues from existing and anticipated agreements are, according to present-day plans, assumed to be sufficient to finance operations until such time as a positive cash flow can be generated.
The rights issue
On 4 November 2014, the Board of Directors of Active Biotech resolved, subject to approval by the shareholders' meeting, to increase the Company's share capital with not more than SEK 56,482,529.18 through issue of not more than 14,984,716 new shares. The subscription price is SEK 15 per share, whereby Active Biotech will be provided with approximately SEK 225 million at full subscription, before issue expenses.
The shareholders of the Company have pre-emptive rights to subscribe for the new shares, whereby five existing shares entitle to subscription for one new share. Shares not subscribed for with pre-emptive rights shall be allocated to persons that have subscribed for shares by exercise of subscription rights and declared their interest to subscribe for shares also without pre-emptive rights, whereby allocation shall be made in relation to the number of subscription rights such persons have exercised for subscription. Thereafter, allocation shall be made to persons that have declared their interest to subscribe for shares without pre-emptive rights.
The record date for the right to participate in the rights issue is 4 December 2014. Subscription for new shares shall be made during the period 8 - 22 December 2014.
The Company's largest shareholders MGA Holding AB, Nordstjernan AB and Investor AB through Duba AB, as well as Peter Thelin (privately and through companies), with a combined holding of approximately 49 per cent of the number of shares and votes of the Company, have undertaken to subscribe for their respective pre-emptive parts of the rights issue.
The resolution of the board is subject to approval by the extraordinary shareholders' meeting that will be held on 1 December 2014. The above-mentioned shareholders have also undertaken to vote in favor of the rights issue at the shareholders' meeting. Notice to the shareholders' meeting will be published through a separate press release today.
A prospectus relating to the rights issue will be made public before the commencement of the subscription period.
|1 December||Extraordinary shareholders' meeting for approval of the board's resolution.|
|2 December||Last day of trading in the Active Biotech share including the right to participate in the rights issue.|
|3 December||First day of trading in the Active Biotech share excluding the right to participate in the rights issue.|
|4 December||Record date for the right to participate in the rights issue.|
|8 - 18 December||Trading in subscription rights.|
|8 - 22 December||Subscription period.|
Advokatfirman Vinge is legal advisor to Active Biotech in connection with the rights issue.
For further information, please contact:
Tomas Leanderson, CEO
Tel: +46 (0)46 19 20 95
Hans Kolam, CFO
Tel: +46 (0)46 19 20 44
Active Biotech AB
Box 724, SE-220 07 Lund, Sweden
Phone +46 (0)46 19 20 00
Fax +46 (0)46 19 11 00
Active Biotech AB (NASDAQ OMX NORDIC: ACTI) is a biotechnology company with focus on neurodegenerative diseases and cancer. In pivotal phase is laquinimod, an orally administered small compound with unique immunomodulatory properties for the treatment of multiple sclerosis and tasquinimod, an orally administered compound with immunomodulatory, metastatic restraining properties for the treatment of prostate cancer. The pre-clinical project ISI has the aim of generating new, patentable chemical compounds for the treatment of the diseases within the company's areas of focus. Please visit www.activebiotech.com for more information
Active Biotech is required to publish the information contained in this press release in accordance with the Swedish Securities Market Act. This information was provided to the media for publication at 8:31 am CET on 5 November 2014.