TIDMONC
RNS Number : 8894R
Oncimmune Holdings PLC
26 September 2017
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, JAPAN, THE REPUBLIC OF SOUTH
AFRICA, THE REPUBLIC OF IRELAND, NEW ZEALAND OR ANY OTHER
JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION
WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT
CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMATION,
OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE
OR DISPOSE OF ANY SECURITIES IN ONCIMMUNE HOLDINGS PLC OR ANY OTHER
ENTITY IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT
OF ITS DISTRIBUTION, SHALL FORM THE BASIS OF, OR BE RELIED ON IN
CONNECTION WITH ANY INVESTMENT DECISION IN RESPECT OF ONCIMMUNE
HOLDINGS PLC. MEMBERS OF THE PUBLIC SHALL NOT BE ELIGIBLE TO TAKE
PART IN THE PROPOSED PLACING, WHICH IS TO BE LIMITED TO PERSONS
SELECTED BY ZEUS CAPITAL AND WHO CONFIRM THEIR PARTICIPATION BY
ENTERING INTO A PLACING CONFIRMATION LETTER WITH ZEUS CAPITAL AS
AGENT OF THE COMPANY IN A PRESCRIBED FORM.
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
Oncimmune Holdings plc ("Oncimmune" or the "Company")
Proposed placing to raise up to GBP5.3m
Oncimmune Holdings plc (AIM: ONC.L), a leading early cancer
detection company developing and commercialising its proprietary
EarlyCDT(R) platform technology, announces a proposed placing to
raise up to GBP5.3 million, (GBP5.0 million net of estimated
expenses), by way of the conditional placing ("Placing") of up to
4,416,666 new ordinary shares ("Placing Shares") at a price of 120
pence per share (the "Issue Price") with existing and new
institutional investors. The Placing Shares to be issued pursuant
to the proposed Placing will represent approximately 7.96 per cent.
of the Enlarged Issued Share Capital of the Company. The Placing
Shares will rank pari passu in all other respects with the
Company's Existing Ordinary Shares.
The Placing Shares are being offered by way of an accelerated
bookbuild ("Bookbuild") on the Company's behalf by the Company's
sole bookrunner, Zeus Capital Limited ("Zeus Capital"). The
Bookbuild will be launched immediately following this announcement.
The timing of the closing of the Bookbuild, the final number and
allocation of Placing Shares to be issued at the Placing Price are
to be determined at the discretion of the Company and Zeus Capital.
A further announcement will be made following closing of the
Placing, confirming the final details of the fundraising.
The Board believes that the Net Proceeds of the Placing of
approximately GBP5.0 million, along with the Company's existing
cash and cash equivalents, would provide sufficient capital to
strengthen its balance sheet to support the completion of major
distribution deals in the following areas:
-- USA for EarlyCDT(R)-Lung;
-- China for EarlyCDT(R)-Lung and
-- "Fingerprint" - a personalised autoantibody profiling approach
Following completion of the major distribution deals, the cash
will be used for:
-- R&D
-- Additional NHS studies to accelerate adoption
-- Additional markers for lung test in the US to enhance its "pulmonology test"
-- Validation and launch of liver test
-- Further validation of fingerprinting
-- Marketing to general practices in the US
In addition, the Board intends to progress development of its
other products (ovarian tests) through to commercial launch, which
it considers to be another key step for the Company.
Geoffrey-Hamilton Fairley, Oncimmune's Chief Executive Officer
said:
"This proposed fundraise will allow us to continue to deliver on
the growth strategy laid out at the time of our IPO involving
generating revenue from multiple products, regions and partners and
we have already made significant progress in delivering on this. We
are confident that Oncimmune is well placed to create and deliver
value from our core autoantibody platform in the medium and long
term."
For further information:
Oncimmune Holdings plc
Geoffrey Hamilton-Fairley, Chief Executive Officer
contact@Oncimmune.co.uk
Zeus Capital Limited (Nominated Adviser and Broker)
Giles Balleny, Phil Walker, Hugh Kingsmill Moore
+44 (0) 203 829 5000
Media enquiries:
Consilium Strategic Communications
Chris Gardner, Matthew Neal, Lindsey Neville
Oncimmune@consilium-comms.com
+44 (0) 20 3709 5708
1. Background to and reasons for the Placing
1.1. Background
Oncimmune is a leading early cancer detection company developing
and commercialising its proprietary EarlyCDT(R) platform
technology. Oncimmune has pioneered the development of autoantibody
tests that can detect cancer up to four years earlier than other
methods and can be applied to a very wide range of solid tumour
types. The Company's first product, EarlyCDT(R)-Lung, was launched
in 2012, as a CLIA test in the USA and since then over 150,000
commercial tests have been sold. EarlyCDT(R)-Lung is available
through physicians in the US and also privately in the UK and other
regions. EarlyCDT(R)-Lung is being used in the largest ever
randomised trial for the early detection of lung cancer using
biomarkers. The NHS Scotland ECLS study of 12,210 high-risk smokers
is fully recruited and in the final follow up stage. EarlyCDT(R)
tests for liver and ovarian cancer are in development.
Oncimmune is headquartered in Nottingham, United Kingdom with
testing facilities in the US and joined AIM in May 2016 under the
ticker ONC.L. For more information visit www.Oncimmune.com
1.2. Progress since the IPO
The Company continues to make good progress against the
commercialisation plans outlined at the IPO. Oncimmune's strategy
remains to improve significantly the outcomes of cancer patients
through early detection of the disease and enhance treatment
pathways. Detecting early stage disease has two key benefits:
better survival for the patients and significantly lower cost of
treatment as most of these early stage patients do not need
expensive chemotherapy. The Company intends, to develop, and make
commercially available and widely accessible, accurate early cancer
detection tests for multiple cancer types.
EarlyCDT(R)-Lung
In the US, Oncimmune has continued to work to identify an
optimal sales and marketing cycle where a physician re-orders the
EarlyCDT(R)-Lung test without the need (and expense) of a repeat
sales visit.
Oncimmune currently has 14 distributors for EarlyCDT(R)-Lung in
the US. It has ongoing discussions with a number of pulmonology
distributors including one where a preliminary distribution
agreement has been signed. Under the terms of the distribution
agreements, the distributor pays Oncimmune c.50% of reimbursement
fee (selling price) with each test reimbursed by Medicare for
c.$123 per test. The process to sell "in network" is underway with
insurers.
As stated in Oncimmune's business update in June 2017, the
Company will invest further in sales support and marketing to
support its distributors whilst ensuring that its partners deliver
high quality and long-term sales as the Company gains confidence in
this approach gaining traction. The Company remains cautious,
however, in terms of near term revenue growth from this channel as
positioning of the test is key to long-term success.
Preliminary Pulmonary Distribution Partnership
Alongside Oncimmune's focus on maximising sales from its
existing customer base, the Company has now also entered a
preliminary distribution partnership with a major US pulmonology
sales force. This followed a detailed research study which verified
the clinical attractiveness of using the EarlyCDT(R)-Lung test in
aiding in the risk assessment of indeterminate pulmonary nodules.
The partnership is expected to run until the end of February 2018
and if successful should lead to a distribution agreement covering
a significant proportion of the pulmonologists in the US. The
Company is also exploring further pulmonology distribution channels
in the US with other parties.
Indeterminate nodules - growths in the lung which may or may not
be malignant - are a major concern for pulmonologists. There are
currently more than 1.5m patients with pulmonary nodules per annum
in the US and the number is expected to grow rapidly with the
expected increased adoption of CT screening for high risk patients
in the US. Sales of EarlyCDT(R)-Lung to pulmonologists have been
forecast to be greater than $400m by 2021[1].
EarlyCDT(R)-Lung test has the potential to enhance significantly
current risk assessment protocols recommended in guidelines in the
US. By providing a simple blood test that is highly specific (and
complementary to CT's sensitivity), it can assist in placing
patients into the appropriate clinical pathway and help to reduce
the number of patients who are in the 'watch and wait' category.
Data published in the Journal of Thoracic Oncology from Vanderbilt
University showed that a positive EarlyCDT(R)-Lung test indicates
that a nodule is two to three times more likely to be cancer.
Asian and European Distribution
Outside of the US, Oncimmune is progressing well. The Company's
Asian business has four distribution agreements in place which
provide GBP5.6m in minimum payment guarantees over the next five
years. The kits will be distributed to hospitals throughout the
region for c.$350 to $450 for 10 tests and the current cost of
goods per 10 tests for Oncimmune is less than $100. There is a
manufacture tender underway from suppliers in Europe and Asia with
a target of a single digit dollar cost.
The Company has recently announced its first distribution
agreements for its EarlyCDT(R)- Lung kit in Europe with exclusive
agreements for Denmark, Norway and Sweden with an aggregate minimum
sales commitment of approximately GBP0.5m.
The Company expects to sign more distribution contracts in Asia
and Europe during the upcoming months, with several of these
arrangements also likely to include guaranteed minimum payments
that would add to the Company's confidence in its chosen
distributors and enhance revenue visibility/predictability.
Oncimmune's particular focus for the Asian market has been set
on China, where lung cancer remains the number one killer of both
men and women, with over 700,000 new cases of lung cancer diagnosed
annually. The Company has entered into discussions with several
diagnostic companies for collaboration opportunities including
licensing and registration, marketing commercialisation,
distribution and local manufacturing.
R&D and Trials
The development and completion of a kit version of the
EarlyCDT(R)-Lung test was a key part of the Company's commercial
growth strategy and R&D plan laid out at the time of its IPO.
The CE Mark for EarlyCDT(R)-Lung test in an ELISA kit format was
received in May 2017. The kit has the advantage of running on
already well established ELISA-96 well-microplate-instruments that
hospitals worldwide have as standard equipment in their
laboratories. This milestone made possible the Asian and European
distribution agreements described above with the potential for
further expansion into world markets.
Beyond the kit, the R&D programme continues to progress. The
Company has laid the foundations for the commercial panel for the
EarlyCDT(R)-Liver test, and remains on track for commercial sales
in H1 2018, with EarlyCDT(R)-Ovarian thereafter. Data showing that
a panel of autoantibodies could detect hepatocellular carcinoma
with high sensitivity and specificity was recently presented at an
international liver cancer conference.
Interim data from the NHS Lung Cancer Screening Trial was also
recently presented at the European 27th International Congress of
the European Respiratory Society (ERS) in Milan. The results remain
encouraging, most notably that over 75% of the patients being
diagnosed have early stage cancers (stage 1 & 2) as opposed to
the vast majority in normal practice presenting with late stage
cancer - which is generally incurable. Now fully recruited, with
12,210 patients, this is the largest randomised control trial using
biomarkers ever conducted in lung cancer. The final study results,
including the control arm, will be published after all patients
have completed two years of follow up CT scans and these are
expected in 2019.
Personalised Medicine & Companion Diagnostics
In companion diagnostics, the Company recently announced the
presentation of data on the use of Oncimmune's autoantibody
technology to successfully predict disease recurrence in subjects
undergoing immunotherapy with Scancell Holding plc's SCIB1
immunotherapy for malignant melanoma.
The collaborative study, which also included a team at the
University of Nottingham, developed a method using a panel of seven
tumour associated autoantibodies to predict disease recurrence in
patients with resected Stage III/IV melanoma treated with SCIB1.
Whilst Phase I/II trials with SCIB1 have been highly encouraging,
this additional information potentially enables the identification
of patients prior to commencement of therapy who are most likely to
respond to treatment in future clinical trials with SCIB1.
Oncimmune is running a number of further studies alongside drug
development programs and expects to be able to announce results
from these in the next 12 months. The Company expects that this
will support the development of this area as a separate business
unit.
Finally, in the second half of 2017 Oncimmune expects to
announce results relating to the second generation of tests from
its autoantibody platform where patients can be their own control
and thus testing is significantly more accurate. The Company
believes this autoantibody "fingerprint" will bring new levels of
performance and lead to a pan-cancer test which could complement
the global vision of some major companies currently investing
heavily in developing personalised medicine platforms and
services.
In conclusion, Oncimmune continues to deliver on its plan to
create value from its core autoantibody platform and the board is
increasingly confident that the Company is well placed to execute
that plan and deliver value in the medium and long term.
1.3. Current trading and prospects
Unaudited revenues for the year 31 May 2017 were GBP0.215m and
cash at the year-end was GBP5.075m. The Company continues to manage
cash and costs tightly and cash at 31 August was over GBP3.0m. 2017
has seen the Company achieve a number of milestones including:
-- The Company's receipt in May of the CE Mark for the
EarlyCDT(R)-Lung kit, with first commercial batches expected to be
shipped by no later than the end of October 2017.
-- Oncimmune's Asian business signing four distribution
agreements which provide minimum payment guarantees of over GBP5.6m
over the next five years, highlighting the Company's ability to
expand and create revenue in world markets.
-- The recent signing of a first distribution agreements for the
EarlyCDT(R)-Lung kit in Europe with agreements for Denmark, Norway
and Sweden with an aggregate minimum sales commitment of
approximately GBP500,000
-- The Company's recently announced four-month preliminary
distribution partnership with a major US pulmonary sales force for
the use of EarlyCDT(R)-Lung in assessing indeterminate lung
nodules, which if successful, should lead to a distribution
agreement for U.S. pulmonologists.
-- The publication of data relating to the EarlyCDT(R)-Liver
panel at the International Liver Cancer Association showing that a
panel of 10 autoantibodies could detect hepatocellular carcinoma
with high sensitivity and specificity
1.4. Reasons for the Placing
The Placing is necessary for the Company to strengthen its
balance sheet to complete major distribution deals in the following
areas:
-- USA for EarlyCDT(R)-Lung;
-- China for EarlyCDT(R)-Lung; and
-- "Fingerprint" - a personalised autoantibody profiling approach
Following completion of the major distribution deals the cash is
to be used for:
-- R&D -
-- Additional NHS studies to accelerate adoption
-- Additional markers for lung test in the US to enhance its "pulmonology test"
-- Validation and launch of liver test
-- Further validation of fingerprinting
-- Marketing to general practices in the US
In addition, the Board intends to progress development of its
other products (ovarian tests) through to commercial launch, which
it considers to be another key step for the Company.
The Placing is critical to help secure a strong commercial
position for Oncimmune at an important stage of the Company's
growth.
Maintaining the strength of the Company's balance sheet is key
to commercially engage with its existing customers and attract
additional major distribution deals. As Oncimmune's multiple
revenue streams and geographical footprint begins to gain traction,
it is essential to continue to strengthen Oncimmune's position in
this sector, having the financial strength to develop the relevant
Kits and bring through the platform technology to market over the
long term.
2. Key elements of the Placing
2.1. Placing
The Company is proposing to raise up to GBP5.3 million, (GBP5.0
million net of estimated expenses), by way of the conditional
placing of up to 4,416,666 Placing Shares at the Issue Price with
existing and new institutional investors. The Placing Shares to be
issued pursuant to the Placing will represent approximately 7.96
per cent. of the Enlarged Share Capital. The Placing Shares will
rank pari passu in all other respects with the Existing Ordinary
Shares. The Issue Price represents a discount of 4.00 per cent. to
the mid-market closing price on 25 September 2017 (being the Latest
Practicable Date).
The Company currently has authority to allot 5,077,400 ordinary
shares on a non-pre-emptive basis. Pursuant to the Placing,
4,416,666 shares under this authority will have been issued,
leaving authority for the Company to issue a further 660,734 shares
on a non-pre-emptive basis. This authority will expire on the date
of the Company's next Annual General Meeting.
The Company has received non-binding indications of interest
from potential investors for the Placing during a pre-marketing
process which is also described in paragraph 4 of this
announcement.
Assuming that the Placing completes, application will be made
for admission of the Placing Shares to trading on AIM, with
Admission expected to become effective and dealings to commence in
the Placing Shares at 8.00 a.m. on 3 October 2017.
A further announcement will be made to confirm its completion in
due course.
3. Enterprise Investment Scheme and Venture Capital Trusts
As part of the Placing, the Company is offering up to GBP3
million worth of Placing Shares ("VCT/EIS Placing Shares") which
the Company believes should qualify as VCT/EIS investments. The
Directors believe that the VCT/EIS Placing Shares should be
eligible (subject to the circumstances of investors) for tax
reliefs under EIS and for investment by VCTs.
The Company has applied for, but not, as at the date of this
announcement, received, advance assurance from HM Revenue &
Customs. Although the Company currently expects to satisfy the
relevant conditions for EIS and VCT investment, and the Directors
are not aware of any subsequent change in the qualifying conditions
or the Company's circumstances that would prevent the VCT/EIS
Placing Shares from being eligible EIS and VCT investments on this
occasion, neither the Directors nor the Company give any warranty
or undertaking that relief will be available in respect of any
investment in the VCT/EIS Placing Shares pursuant to this
announcement, nor do they warrant or undertake that the Company
will conduct its activities in a way that qualifies for or
preserves its status.
Companies can raise up to GBP5 million from State Aid investment
sources, including under the combined EIS and from VCTs, in any 12
month period. As the rules governing EIS and VCT reliefs are
complex and interrelated with other legislation, if Shareholders,
or any potential investors are in any doubt as to their tax
position, require more detailed information than the general
outline above, or are subject to tax in a jurisdiction other than
the United Kingdom, they should consult their professional
adviser.
4. Market Abuse Regulation
Market Soundings, as defined in the Market Abuse Regulation
("MAR"), were taken in respect of the proposed Placing with the
result that certain persons became aware of inside information, as
permitted by MAR. That inside information is set out in this
announcement and has been disclosed as soon as possible in
accordance with paragraph 7 of article 17 of MAR. Therefore, those
persons that received inside information in a Market Sounding are
no longer in possession of inside information relating to the
Company and its securities.
DEFINITIONS
The following definitions apply throughout this announcement
unless the context requires otherwise:
"Admission" the admission of the Placing Shares to trading on
AIM becoming effective in accordance with the AIM Rules
"AIM" the market of that name operated by the London Stock
Exchange
"AIM Rules" the provisions of the London Stock Exchange entitled
"AIM Rules for Companies" as amended or reissued from time to time
governing, amongst other things, admission to AIM and the
continuing obligations of AIM companies
"Board" the board of Directors of the Company as at the date of
this announcement
"Company" or "Oncimmune" Oncimmune Holdings plc
"Directors" the Directors of the Company as at the date of this
announcement
"EIS" Enterprise Investment Scheme
"Enlarged Issued Share Capital" the issued share capital of the
Company as enlarged by the issue of the Placing Shares
"Existing Ordinary Shares" the 51,049,404 Ordinary Shares in
issue, comprising the whole of the issued share capital of the
Company, as at the date of this announcement
"FCA" the Financial Conduct Authority of the United Kingdom
"FSMA" Financial Services and Markets Act 2000 (as amended)
"Issue Price" 120 pence per new Ordinary Share
"Latest Practicable Date" the latest date practicable prior to
the publication of this announcement, being 25 September 2017
"Net Proceeds" the Gross Proceeds of the Placing net of
expenses
"Ordinary Shares" ordinary shares of 1p each in the capital of
the Company
"Placees" the persons with whom Placing Shares are to be
placed
"Placing" the conditional placing of the Placing Shares
"Placing Shares" the new Ordinary Shares which are the subject
of the Placing
"Prospectus Rules" the rules made for the purposes of Part V of
FSMA in relation to offers of securities to the public and
admission of securities to
"Shareholder(s)" holder(s) of Ordinary Shares
"UK" or "United Kingdom" the United Kingdom of Great Britain and
Northern Ireland
"US" or USA" the United States of America and all of its
territories and possession
"VCT" Venture Capital Trust
"Zeus Capital" Zeus Capital Limited of 82 King Street,
Manchester, M2 4WQ, being the Company's Nominated Adviser and
Broker
Forward-looking statements
This announcement contains statements about Oncimmune Holdings
plc that are or may be deemed to be "forward-looking
statements".
All statements, other than statements of historical facts,
included in this announcement may be forward-looking statements.
Without limitation, any statements preceded or followed by, or that
include, the words "targets", "plans", "believes", "expects",
"aims", "intends", "will", "may", "should", "anticipates",
"estimates", "projects", "would", "could", "continue" or words or
terms of similar substance or the negative thereof, are
forward-looking statements. Forward-looking statements include,
without limitation, statements relating to the following: (i)
future capital expenditures, expenses, revenues, earnings,
synergies, economic performance, indebtedness, financial condition,
dividend policy, losses and future prospects and (ii) business and
management strategies and the expansion and growth of the
operations of Oncimmune Holdings plc.
These forward-looking statements are not guarantees of future
performance. These forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of any such person, or
industry results, to be materially different from any results,
performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements are
based on numerous assumptions regarding the present and future
business strategies of such persons and the environment in which
each will operate in the future. Investors should not place undue
reliance on such forward-looking statements and, save as is
required by law or regulation (including to meet the requirements
of the AIM Rules, the Prospectus Rules and/or the FSMA), Oncimmune
Holdings plc does not undertake any obligation to update publicly
or revise any forward-looking statements (including to reflect any
change in expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based).
All subsequent oral or written forward-looking statements
attributed to Oncimmune Holdings plc or any persons acting on their
behalf are expressly qualified in their entirety by the cautionary
statement above. All forward-looking statements contained in this
announcement are based on information available to the Directors of
Oncimmune Holdings plc at the date of this announcement, unless
some other time is specified in relation to them, and the posting
or receipt of this announcement shall not give rise to any
implication that there has been no change in the facts set forth
herein since such date.
[1] Health Advances, Boston 2014
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCGMGZLVVDGNZM
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