The Board of Directors of Xbrane has resolved on a fully guaranteed rights issue of up to approximately SEK 60 million
28 February 2019
The Board of Directors in Xbrane Biopharma AB (publ) ("Xbrane" or the "Company") has today, pursuant to the authorization granted by the annual general meeting on 24 May 2018, resolved on a fully guaranteed new share issue of a maximum of 1,977,887 shares with preferential rights for the Company's existing shareholders (the "Rights Issue"). The subscription price in the Rights Issue is SEK 30 per share. The Company will receive SEK 59,336,610 before deduction of transaction costs related to the Rights Issue.
- The proceeds from the Rights Issue will primarily be used to finance the development of Xlucane. In addition, the proceeds will be used to finance costs in relation to development of other product candidates and the Company's operations and working capital.
- Existing shareholders in the Company receives five subscription rights for each share held as of the record date. 16 subscription rights entitles the holder to subscribe for one new share in the Rights Issue.
- Record date for participation in the Rights Issue is 7 March 2019.
- Subscription in the Rights Issue may occur under the period as of 11 – 25 March 2019.
- The Company will receive approximately SEK 59,336,610 before deduction of transaction costs related to the Rights Issue.
- The subscription price in the Rights Issue is SEK 30 per share, which corresponds to a discount of approximately 22.76 percent compared with the theoretical price after separation of subscription rights, based on the closing price of the Xbrane share on 27 March 2019 on Nasdaq First North.
- For existing shareholders not participating in the Rights Issue, a dilution effect corresponding to 19.23 percent of the total number of shares and votes in the Company following the Rights Issue will arise.
- Certain of the Company's largest shareholders, board members and management have undertaken to subscribe for their respective pro-rata share of the Rights Issue. These subscription undertakings amount to, in aggregate, approximately SEK 8 million, equivalent to approximately 14 percent of the Rights Issue. In addition, the Company has received guarantee commitments amounting to approximately SEK 51 million from certain existing shareholders including one member of the management  and external guarantors, corresponding to approximately 86 percent of the Rights Issue. Consequently, the Rights Issue is fully guaranteed.
- In connection to the Rights Issue, the Company and Serendipity Group have entered into an addendum agreement to the loan agreement entered into on 22 December 2017 regarding a credit facility of MSEK 45. In accordance with the addendum agreement, the repayment of the loan has been prolonged to 30 June 2020. Moreover, Serendipity Group shall, in accordance to the addendum agreement, set-off its pro-rata portion in the Rights Issue against the equivalent amount of the loan, i.e., approximately MSEK 6.4.
Background and reasons
In July 2018, Xbrane entered into a cooperation agreement with STADA Arzneimittel AG ("STADA") regarding development, marketing and sale of Xbrane's primary biosimilar Xlucane (ranibizumab (Lucentis®) biosimilar). STADA is a well-established global pharmaceutical company focused on biosimilars and generics. STADA currently sells pharmaceutical products in over 130 countries. The agreement entails that the companies share equally on all upcoming development costs and profits that is generated from sales of Xlucane. Xbrane will be responsible for the development of the product until market authorization, whilst STADA will be responsible for the sales and marketing of the product. Xlucane is, as far as the Company is aware, the only biosimilar for Lucentis® with a commercialization partner in place and in a pivotal phase III trial with the aim for market authorization in Europe and the US.
In January 2019, the Company received an approval from the United States Food and Drug Administration ("FDA") and the central ethical committee to initiate a clinical trial with Xlucane in the US. Xbrane and STADA will in the first quarter of 2019 initiate the pivotal clinical trial for Xlucane in order to be able to apply for market authorization in Europe and the US in time, to enable a launch of the product in the first quarter of 2022 when the patent for the original product Lucentis® will expire in Europe. Xbrane shall pay half of the costs for the trial, which is estimated to approximately MSEK 300-350.
The market for biosimilars is relatively young, the first biosimilar was approved in Europe 2006 and in the US 2015 and the market is estimated to grow with approximately 30 percent per year up until 2022. The market for biosimilars is mainly driven by expiration of patents on biologics that enable launch of new biosimilars, increased acceptance from doctors and patients as well as lobbying from public and private payers to use the most cost efficient alternatives.
With its 32 employees, the Company has a broad competence in the development of biosimilars, which enabled the development of Xlucane up until the co-development agreement with STADA and initiation of the pivotal clinical trial. Together with additional marketing and sales expertise from STADA, the Board of Directors believes that the Company has good prospects of achieving the desired sales potential. Xbrane believes that the Company is well positioned to meet the expected increasing demand for biosimilars, as the Company also believes that it has few competing biosimilars to Xlucane. To finance its part of the clinical study, Xbrane needs to raise additional capital to the project.
Use of proceeds
The Company intends to use approximately 70 percent of the proceeds from the Rights Issue to finance the development of Xlucane and approximately 30 percent to finance costs in relation to development of other product candidates and the Company's operations and working capital.
The Board of Directors of the Company has today, pursuant to the authorization granted by the annual general meeting held on 24 May 2018, resolved on a new share issue of up to a maximum of 1,977,887 shares with preferential rights for the Company's existing shareholders in proportion to their shareholdings as of the record date 7 March 2019.
Holders of shares, which on the record date of 7 March 2019 are entered in the share register held by Euroclear Sweden AB, have the preferential right to shares in the Rights Issue. One existing share gives right to five subscription rights and 16 subscription rights entitles the holder to subscribe for one new share in the Rights Issue at a subscription price of SEK 30 per share. The subscription price corresponds to a discount of approximately 22.76 percent compared to the theoretical price after the separation of subscription rights, based on the closing price of the Xbrane share on 28 March 2019 on Nasdaq First North.
The Company will receive approximately SEK 59,336,610 before deduction of transaction costs related to the Rights Issue.
The Rights Issue will result, in an increase of the share capital of a maximum of approximately SEK 443,415. Upon full subscription, the number of shares in Xbrane, after the Rights Issue, will amount to a maximum of 8,307,126 shares and the share capital will amount to a maximum of approximately SEK 1,862,342. For existing shareholders not participating in the Rights Issue, a dilution effect corresponding to approximately 19.23 percent of the total number of shares and votes in the Company following the Rights Issue will arise. Shareholders who choose not to participate in the Rights Issue have the opportunity to compensate for the economic dilution effect by selling their subscription rights.
The last day of trading in Xbrane's shares, including the right to receive subscription rights in the Rights Issue, is 5 March 2019. Subscription of shares with subscription rights shall be by cash payment during the period from 11 – 25 March 2019. Subscription of shares without subscription rights shall be made on a special subscription list during the period from 11 – 25 March 2019. Payment for shares subscribed without subscription rights shall be made in cash no later than two banking days following the issue of the settlement note, which indicates notification of allocation. The Board of Directors is entitled to extend the subscription period and the last day for payment.
If all of the new shares are not subscribed for with subscription rights, the board will decide on allotment of new shares subscribed for without subscription rights. Allocation will then be decided in the priority as set forth below:
- Firstly, if all of the new shares are not subscribed for with subscription rights, the board will decide on allotment of new shares subscribed for without subscription rights. Allotment will then be made firstly to persons who have applied for subscription without subscription rights and who have subscribed for shares with subscription rights, regardless of whether or not the subscriber was a shareholder on the record date, and in case of oversubscription, allocation shall be made in relation to the total number of shares allotted through exercise of subscription rights, and to the extent that this is not possible, by drawing of lots.
- Secondly, allocation shall be made to other persons who have applied for subscription without subscription rights, and in the case of oversubscription, pro rata to the new number of shares subscribed for in the application form, and to the extent that this is not possible, by drawing of lots.
- Finally, allotment of the remaining shares shall be made to the investors who have provided guarantees and in accordance with the conditions of their respective guarantee.
The full terms and conditions of the Rights Issue and information about the Company will be included in a prospectus expected to be published on the Company's website around 7 March 2019.
Subscription undertakings and guarantees
Certain of the Company's largest shareholders, board members and management have undertaken to subscribe for their respective pro-rata share of the Rights Issue. These subscription undertakings amount to, in aggregate, approximately SEK 8 million, equivalent to approximately 14 percent of the Rights Issue. In addition, the Company has received guarantee commitments amounting to approximately SEK 51 million from certain existing shareholders including one member of the management and external guarantors, corresponding to approximately 86 percent of the Rights Issue. Consequently, the Rights Issue is fully guaranteed.
In connection to the Rights Issue, the Company and Serendipity Group have entered into an addendum agreement to the loan agreement entered into on 22 December 2017 regarding a credit facility of MSEK 45. In accordance to the addendum agreement, the repayment of the loan has been prolonged to 30 June 2020. Moreover, Serendipity Group shall, in accordance with the addendum agreement, set-off its pro-rata portion in the Rights Issue against the equivalent amount of the loan, i.e., approximately MSEK 6.4.
Preliminary time table for the Rights Issue
|Last day of trading in shares including right to receive subscription rights||5 March 2019|
|First day of trading in shares excluding right to receive subscription rights||6 March 2019|
|Record date for participation in the Rights Issue||7 March 2019|
|Prospectus announced and published on the Company's web page||7 March 2019|
|Subscription period||11 March – 25 March 2019|
|Trading in subscription rights||11 March – 21 March 2019|
|Trading in BTA's ends||11 March – 11 April 2019|
|Announcement of final outcome in the Rights Issue||Around 27 March 2019|
|Trading in new shares commences||Around 15 April 2019|
|Delivery of new shares||Around 17 April 2019|
Vator Securities is financial adviser and Baker McKenzie is legal adviser to the Company in connection with the Rights Issue.
This information is information that Xbrane Biopharma AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out below, on 28 February 2019 at the time set out above.
For more information, contact:
Martin Åmark, CEO/IR
M: +46 (0) 763-093 777
Susanna Helgesen, CFO
M: +46 (0) 708-278 636
Xbrane is a commercial phase Swedish biopharmaceutical company specialized in biosimilars. Xbrane has a patented protein production platform for development of biosimilars and world leading expertise in biosimilars. Xbrane's headquarter is located in Solna outside of Stockholm and the company's in-house research and development facilities are in Sweden and Italy. Xbrane is listed at Nasdaq First North since February 3rd, 2016 under the name XBRANE and Avanza Bank AB is Xbrane's certified adviser (email@example.com, +46 (0)8 409 421 20). For more information seewww.xbrane.com.
The release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions. The recipients of this press release in jurisdictions where this press release has been published or distributed shall inform themselves of and follow such restrictions. The recipient of this press release is responsible for using this press release, and the information contained herein, in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer, or a solicitation of any offer, to buy or subscribe for any securities in Xbrane in any jurisdiction, neither from Xbrane nor from someone else.
Any investment decision in connection with the Rights Issue must be made on the basis of all publicly available information relating to the Company. Such information has not been independently verified by the financial advisors. The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness.
This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public offering of the securities in the United States. The information in this press release may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, within or into Australia, Hong Kong, Japan, Canada, New Zealand, Singapore, South Africa, the United States or in any other jurisdiction where such announcement, publication or distribution of the information would not comply with applicable laws and regulations or where such actions are subject to legal restrictions or would require additional registration or other measures than what is required under Swedish law. Actions taken in violation of this instruction may constitute a crime against applicable securities laws and regulations.
This press release is not a prospectus for the purposes of Directive 2003/71/EC (the "Prospectus Directive") and has not been approved by any regulatory authority in any jurisdiction. A prospectus regarding the Rights Issue described in this press release will be prepared and submitted to Swedish Financial Supervisory Authority (Sw. Finansinspektionen). Following the Swedish Financial Supervisory Authority's approval and registration of the prospectus, the prospectus will be published and kept available at Xbrane's website.
In the United Kingdom, this document and any other materials in relation to the securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this document relates is available only to, and will be engaged in only with, "qualified investors" who are (i) persons having professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). In the United Kingdom, any investment or investment activity to which this communication relates is available only to, and will be engaged in only with, relevant persons. Persons who are not relevant persons should not take any action on the basis of this press release and should not act or rely on it.
This press release contains forward-looking statements that reflect the Company's intentions, beliefs, or current expectations about and targets for the Company's future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the Company operates. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "intend", "may", "plan", "estimate", "will", "should", "could", "aim" or "might", or, in each case, their negative, or similar expressions. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not guarantee that the assumptions underlying the forward-looking statements in this press release are free from errors and readers of this press release should not place undue reliance on the forward-looking statements in this press release. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of its date and are subject to change without notice. Neither the Company nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release.
Information to distributors
Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the shares in Xbrane have been subject to a product approval process, which has determined that such shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, Distributors should note that: the price of the shares in Xbrane may decline and investors could lose all or part of their investment; the shares in Xbrane offer no guaranteed income and no capital protection; and an investment in the shares in Xbrane is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the share issue.
For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the shares in Xbrane.
Each distributor is responsible for undertaking its own Target Market Assessment in respect of the shares in Xbrane and determining appropriate distribution channels.
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This announcement is distributed by West Corporation on behalf of West Corporation clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Xbrane Biopharma AB via Globenewswire