29th Apr 2009 07:00
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR SOUTH AFRICA.
THE CONTENTS OF THIS ANNOUNCEMENT DO NOT CONSTITUTE OR FORM PART OF AN OFFER OF OR INVITATION TO SELL OR ISSUE OR ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR ANY SECURITIES FOR SALE IN ANY JURISDICTION NOR SHALL THEY (OR ANY PART OF THEM) OR THE FACT OF THEIR DISTRIBUTION FORM THE BASIS OF, OR BE RELIED UPON IN CONNECTION WITH, OR ACT AS AN INDUCEMENT TO ENTER INTO, AND CONTRACT OR COMMITMENT TO DO SO. THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS FOR THE PURPOSES OF EU DIRECTIVE 2003/71/EC (THE "DIRECTIVE") AND PART VI OF THE FINANCIAL SERVICES AND MARKETS ACT 2000. A PROSPECTUS WILL BE PREPARED AND MADE AVAILABLE TO THE PUBLIC IN ACCORDANCE WITH THE DIRECTIVE. RECIPIENTS OF THIS ANNOUNCEMENT WHO INTEND TO PURCHASE SUCH SECURITIES ARE REMINDED THAT ANY SUCH PURCHASE OR SUBSCRIPTION MUST BE MADE SOLELY ON THE BASIS OF THE INFORMATION CONTAINED IN THE PROSPECTUS IN ITS FINAL FORM.
THE SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, UNLESS REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION. NO PUBLIC OFFERING OF THE SECURITIES DISCUSSED HEREIN IS BEING MADE IN THE UNITED STATES AND THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFERING OF SECURITIES FOR SALE IN THE UNITED STATES AND THE COMPANY DOES NOT CURRENTLY INTEND TO REGISTER ANY SECURITIES UNDER THE SECURITIES ACT. THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES.
Vernalis plc
Fully Underwritten Placing and Open Offer of 799,112,129 New Ordinary Shares at 3 pence per share (subject to the effect of the Share Capital Reorganisation) raising £22.1m (net)
Approval of a Related Party transaction
Approval of a waiver of the obligations under Rule 9 of the Takeover Code
Vernalis plc (LSE: VER) ("Vernalis" or the "Company"), a development stage pharmaceutical company developing a pipeline of clinical and early stage programmes, announces today that it is proposing to raise approximately £22.1m (net of expenses) through a fully underwritten Placing and Open Offer of 799,112,129 New Ordinary Shares at a price of 3 pence per New Ordinary Share. The Company also announces a Share Capital Reorganisation.
A shareholder circular (which is also a prospectus) being issued by the Company and containing details of the Placing and Open Offer and Share Capital Reorganisation is expected to be posted to Shareholders shortly.
Highlights
A prospectus being issued by the Company and containing details of the Placing and Open Offer, the Share Capital Reorganisation and the Rule 9 Waiver will be posted to Shareholders shortly. Shareholders in the United States, Canada, Japan or any other excluded territory will not, subject to certain exceptions, be able to participate in the Placing and Open Offer but will be able to vote on the Rule 9 Waiver.
Reasons for the Placing and Open Offer and use of net proceeds
The Directors currently expect that the Group's existing cash resources of approximately £13.8 million as at 28 February 2009, after allowing £3.5 million for the final milestone payment to GSK in respect of frovatriptan, together with the net proceeds from the Placing and Open Offer of £22.1 million, will be invested as follows:
invest in the development of a Phase IIb study and other Phase III enabling activities for V3381 (neuropathic pain);
initiation and completion of pre-clinical, Phase I and proof-of-concept in man studies for V158866 (FAAH inhibitor - chronic pain);
selection of a Chk1 development candidate, as well as initiation and completion of pre-clinical and Phase I studies (oncology); and
general corporate purposes, including remuneration costs and administrative overheads.
In addition to the above unpartnered programmes, Vernalis has a number of partnerships with, and funded by, major pharmaceutical companies, which endorse its technologies:
|
V2006 (Parkinson's Disease) Biogen Idec |
Next event: Registration Studies |
|
NVP-ALLY922 (cancer) Novartis |
Next event: Phase II |
|
Hsp90 (oral) (cancer) Novartis |
Next event: Phase I |
|
Pre-clinical (cancer) (x2) Servier |
Ian Garland, Chief Executive Officer of Vernalis, commented:
"Vernalis has, for its size, a broad pipeline of partnered and unpartnered drug candidates with significant therapeutic and commercial potential. Raising capital was an important first stage of our plan to re-build significant shareholder value and to remove a significant uncertainty over the Company's future. The major support from Invesco and the fully underwritten fundraising announced today will enable us to progress our promising pipeline both in-house and in collaboration with partners, and begin to re-build shareholder value."
A meeting and conference call for analysts will be held today at 9.30 a.m. BST. For details, contact Valerie Mugridge at Brunswick on telephone number +44 (0) 20 7396 5325. An instant replay of the call will be available via Vernalis' website at www.vernalis.com. The webcast replay will be available for 30 days.
Expected Timetable of Principal Events
|
|
2009
|
|
Record Date for entitlements under the Open Offer
|
28 April
|
|
Ex-entitlement date
|
29 April
|
|
Despatch of Prospectus, Application Forms and Forms of Proxy
|
29 April
|
|
Open Offer entitlements credited to stock accounts in CREST of Qualifying CREST Shareholders
|
30 April
|
|
Latest recommended date for requested withdrawal of Open Offer Entitlements from CREST
|
4.30 p.m. on 11 May
|
|
Latest time for depositing Open Offer entitlement into CREST
|
3.00 p.m. on 12 May
|
|
Latest time and date for splitting Application Forms (to satisfy bona fide market claims)
|
3.00 p.m. on 13 May
|
|
Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer or settlement of relevant CREST instructions (as appropriate)
|
11.00 a.m. on 15 May
|
|
Results of the Placing and Open Offer announced through an RIS
|
15 May
|
|
Latest time and date for receipt of Forms of Proxy
|
3.00 p.m. on 16 May
|
|
General Meeting
|
11.00a.m. on 18 May
|
|
Admission and commencement of dealings in Placing and Open Offer Shares expected to commence
|
8.00 a.m. on 19 May
|
|
CREST stock accounts expected to be credited for the Placing and Open Offer Shares
|
8.00 a.m. on 19 May
|
|
Share certificates for Placing and Open Offer Shares expected to be despatched Share certificates for Placing and Open Offer Shares expected to be despatched
|
8.00 a.m. on 27 May
|
Each of the times and dates in the above timetable is subject to change, in which event details of the new times and/or dates will be notified to the Financial Services Authority and the London Stock Exchange and, where appropriate, Shareholders. Please note that any Existing Ordinary Shares sold prior to close of business on 28 April 2009, the date on which the Existing Ordinary Shares will trade with entitlement, will be sold to the purchaser with the right to receive entitlements under the Open Offer.
If you have any questions relating to the procedure for acceptance, please telephone Capita Registrars between 9.00 a.m. and 5.00 p.m. (London time) Monday to Friday (except UK public holidays) on 0871 664 0321 from within the UK or +44 20 8639 3399 if calling from outside the UK. Calls to the 0871 664 0321 number cost 10 pence per minute (including value added tax) plus your service provider's network extras. Calls to the helpline from outside the UK will be charged at applicable international rates.
Different charges may apply from mobile phones and calls may be recorded and randomly monitored for security and training purposes. The helpline cannot provide advice on the merits of the Placing and Open Offer nor give any financial, legal or tax advice.
Enquiries
|
Vernalis plc |
+44 (0) 1189 899 300 |
|
Ian Garland / David Mackney |
|
|
Piper Jaffray |
+44 (0) 20 3142 8700 |
|
Neil Mackison / Rupert Winckler / Jamie Adams |
|
|
Brunswick |
+44 (0) 20 7404 5959 |
|
Jon Coles / Justine McIlroy / Annabel Entress |
Piper Jaffray Ltd., which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for the Company as sponsor, join broker and joint underwriter in connection with the Placing and Open Offer and not for any other person and will not be responsible to any other person for providing the protections afforded to its customers or for providing advice in relation to the Placing and Open Offer, the contents of the Prospectus and, if relevant, the accompanying documents or any arrangements referred to therein.
This news release has been issued by Vernalis plc and is the sole responsibility of Vernalis plc.
The distribution of this announcement in certain jurisdictions may be restricted by law and such distribution could result in violation of the laws of such jurisdictions. In particular, this announcement is not for distribution in the United States, Australia, Canada, Japan or South Africa.
This announcement is not an offer of securities for sale in the United States. The Placing and Open Offer Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") or under the applicable securities laws of any state or other jurisdiction of the United States or qualified for distribution under any applicable securities laws in Canada, Australia, South Africa or Japan. The Placing and Open Offer Shares may not be offered or sold, directly or indirectly, within the United States absent registration or an exemption from registration under the Securities Act and in compliance with any applicable securities laws of the states of the United States. No public offering of the securities discussed herein is being made in the United States and the information contained herein does not constitute an offering of securities for sale in the United States, Canada, Australia, Japan or South Africa. This announcement is not for distribution directly or indirectly in or into the United States, Canada, Australia, Japan or South Africa.
Neither the Placing and Open Offer Shares, the related Prospectus, this announcement nor any other document connected with this Placing and Open Offer have been or will be approved or disapproved by the United States Securities and Exchange Commission or by the securities commissions of any state or other jurisdiction of the United States or any other regulatory authority, nor have any of the foregoing authorities or any securities commission passed upon or endorsed the merits of the offering of the Placing and Open Offer Shares. Any representation to the contrary is a criminal offence.
This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities. Any purchase of, or application for, the New Ordinary Shares should be made only on the basis of information contained in the Prospectus to be sent to Qualifying Shareholders shortly.
The delivery of this announcement shall not, under any circumstances, create any implication that there has been no change in the affairs of the Group since the date of this announcement nor that the information in it is correct as of any subsequent time.
This announcement may contain forward-looking statements that reflect the Group's current expectations regarding future events, including the clinical development and regulatory clearance of the Group's products, the Group's ability to find partners for the development and commercialisation of its products, the Group's liquidity and results of operations, as well as the Group's future capital raising activities. Forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors, including the success of the Group's research strategies, the applicability of the discoveries made therein, the successful and timely completion of clinical studies, the uncertainties related to the regulatory process, the ability of the Group to identify and agree beneficial terms with suitable partners for the commercialisation and/or development of its products, the acceptance of the Group's products by consumers and medical professionals, and the ability of the Group to identify and consummate suitable strategic and business combination transactions.
Vernalis plc
PLACING AND OPEN OFFER OF 799,112,129 NEW ORDINARY SHARES AT
A PRICE OF 3 PENCE PER SHARE (SUBJECT TO THE EFFECT OF THE SHARE CAPITAL REORGANISATION), APPROVAL OF RELATED PARTY TRANSACTION, APPROVAL OF RULE 9 WAIVER AND NOTICE OF GENERAL MEETING
Introduction
Vernalis today announced its results for the financial year ended 31 December 2008 and its intention to raise approximately £22.1 million (net of expenses) by way of a fully underwritten Placing and Open Offer of 799,112,129 New Ordinary Shares at 3 pence per share (subject to the effect of the Share Capital Reorganisation) conditional, inter alia, upon the passing by Shareholders of the Resolutions at the General Meeting. The Offer Price of 3 pence per New Ordinary Share represents a 25.9 per cent. discount to the Closing Price of an Existing Ordinary Share of 4.05 pence on 28 April 2009 (being the latest practicable date prior to the publication of this document).
In addition, Invesco Asset Management Limited, acting as agent for and on behalf of its discretionary managed clients ("IAML"), which holds 91,274,683 Existing Ordinary Shares (representing approximately 25.13 per cent. of the existing issued ordinary share capital of the Company), has committed to take up, in full, its Open Offer Entitlements in respect of 200,804,302 New Ordinary Shares and has agreed to subscribe up to a further £3.2 million in aggregate for New Ordinary Shares under the Placing, subject to clawback to satisfy valid applications under the Open Offer (representing, assuming no clawback, in aggregate, not more than 34.4 per cent. of the Enlarged Share Capital). Depending on the level of take up of the Open Offer by Qualifying Shareholders, IAML will have a shareholding of between 25.13 per cent. and 34.4 per cent. upon Admission. If the interests of IAML in the Company increase above 30 per cent., following the Placing and Open Offer, IAML would normally be obliged to make a general offer, pursuant to Rule 9 of the Takeover Code, to all other Shareholders. However, in this instance, the Takeover Panel has agreed to waive the obligation to make a general offer that would otherwise arise as a result of IAML subscribing for the Placing and Open Offer Shares, subject to the approval of the Independent Shareholders on a poll at the General Meeting.
Qualifying Shareholders will be invited to apply for New Ordinary Shares on the basis of 11 New Ordinary Shares for every 5 Existing Ordinary Shares held. Piper Jaffray has agreed, as agent for the Company, to make the Open Offer in relation to 799,112,129 New Ordinary Shares (subject to the effect of the Share Capital Reorganisation) to Qualifying Shareholders at the Offer Price. Piper Jaffray has also placed 799,112,129 New Ordinary Shares (subject to the effect of the Share Capital Reorganisation) pursuant to the Placing and Open Offer subject to clawback to satisfy valid applications by Qualifying Shareholders under the Open Offer. The Placing and Open Offer, the Rule 9 Waiver and associated proposals are conditional, inter alia, on the passing by Shareholders of the Resolutions at the General Meeting, which is being convened for 11.00 a.m. on 18 May 2009.
Background to and Rationale for the Placing and Open Offer
Vernalis is a development stage pharmaceutical company developing a pipeline of clinical and early stage programmes. In late 2007 and 2008, the Company underwent a major restructuring exercise following a setback related to its then lead programme, Frova® (frovatriptan), which forced a significant change in the Company's strategy of building a sustainable, self-funding speciality pharmaceutical business.
Vernalis undertook to secure a highly experienced management team to re-position and lead the Company in implementing a new strategy and re-building Shareholder value. This culminated in the appointment in December 2008 of Ian Garland as the Company's new Chief Executive Officer, followed by the appointment in February 2009 of David Mackney as Chief Financial Officer. As described in further detail below, Vernalis' new strategy is to re-build value for Shareholders by selectively investing in high potential value, novel medicines, while partnering programmes where appropriate and maintaining tight control of costs. It is expected that these medicines will derive both from the Company's internal research operations, as well as from early-stage candidates sourced through in-licensing or acquisition activities. In order to finance the Group's continued operations and to execute its new strategy, and in order to further develop the Company's current pipeline, Vernalis is undertaking the Placing and Open Offer.
The Company's current portfolio of products is as follows:
|
Product |
Indication |
Late Research |
Pre-clinical |
Phase I |
Phase II |
Phase III |
Marketing Rights |
Peak Sales* |
Next value event |
|
V3381 |
Neuropathic Pain |
X |
Worldwide |
$$$ |
Phase IIb results 2010, then partner |
||||
|
V1512 |
Parkinson's Disease (moderate/ advanced) |
X |
Worldwide (excluding Italy) |
$ |
Possible partnering 2009, then 505(b)/(2) US NDA |
||||
|
V10153 |
Ischaemic stroke |
X |
Worldwide |
$ |
Possible partnering |
||||
|
V2006 |
Parkinson's Disease |
X |
Biogen Idec |
$$ |
Commence registration studies undisclosed |
||||
|
V85546 |
Inflammatory Disease |
X |
Worldwide |
$$$ |
Possible partnering Start Phase II 2009-2010 |
||||
|
V24343 |
Obesity/ Diabetes |
X |
Worldwide |
n/a |
None expected |
||||
|
NVP-AUY922 |
Cancer |
X |
Novartis |
$$ |
Enter Phase II undisclosed |
||||
|
Hsp90 inhib. (Oral) |
Cancer |
X |
Novatis |
See NVP-AUY922 |
Enter Phase I undisclosed |
||||
|
V158866 (FAAH) |
Pain |
X |
Worldwide |
$$$ |
File IND 2010 |
||||
|
Ckh1 |
Cancer |
X |
Worldwide |
$$$ |
Enter pre-clinical 2009 |
* $ = up to $150 million, $$ = 150-500 million, $$$ = greater than $500 million
Use of Proceeds
The Directors currently expect that the Group's existing cash resources of approximately £13.8 million as at 28 February 2009, after allowing £3.5 million for the final milestone payment to GSK in respect of frovatriptan, together with the net proceeds from the Placing and Open Offer of £22.1 million, will be invested as follows:
(a) approximately 80 per cent. in Vernalis' clinical development and discovery research programmes, including:
V3381: completion of the Phase IIb neuropathic pain study and other Phase III enabling activities;
V158866: initiation and completion of pre-clinical, Phase I and proof-of-concept in man studies; and
Chk1: selection of a development candidate, initiation and completion of pre-clinical and Phase I studies.
(b) approximately 20 per cent. for general corporate purposes inclusive of remuneration costs and administrative overheads.
Plans for investment in specific drug candidates may change over time as a result of regular portfolio reviews undertaken by the Company, specifically, investment in the V3381 Phase III enabling studies which is likely to take place only when the Group has entered into additional collaboration or partnering arrangements.
Current Trading and Prospects
During 2008 the Group implemented an extensive restructuring of its business under which it settled its loan with Endo, raised finance from its European frovatriptan royalty stream with Paul Capital Healthcare, sold Apokyn® and the Group's US Commercial Operations to Ipsen, closed its Winnersh based research facility and downsized from 210 to 91 heads. Restructuring was concluded in the second half of 2008 and achieved its goal of refocusing the Group on delivering Shareholder value from its research and development activities.
The Group expanded its pipeline during 2008 with the October 2008 reacquisition from Merck Serono of exclusive worldwide rights to V85546, a Phase II ready novel selective anti-inflammatory that targets MMP12 and has in-vivo efficacy in pre-clinical models of Chronic Obstructive Pulmonary Disease (COPD), Multiple Sclerosis (MS) and liver fibrosis. Since the end of the year the pipeline has been expanded further with the selection of a pre-clinical candidate, V158866, from our late stage research programme targeting FAAH, a novel target with potential application in a range of chronic pain conditions. In December 2008 the Group commenced recruitment of patients into a Phase IIb study of V3381 in neuropathic pain. We anticipate full recruitment of the 150 patients in this study by the end of 2009 and data becoming available in 2010.
Final study data from the V10153 Phase II open label stroke study has now been received and confirms that 5mg/kg is the appropriate dose to take forward into future studies. We will review the final data from this study with key opinion leaders during 2009 to determine the most appropriate path for further development of this compound. We will not make any further investment in V10153 in-house and instead we will seek to progress this programme in collaboration with a partner. Our CB1 receptor antagonist, V24343, is being evaluated in an ongoing dose ranging Phase I study which is expected to report during the first half 2009. During late 2008, the class leading CB1 receptor antagonist marketed by Sanofi Aventis was withdrawn from the market in the EU following the decision by the EMEA that the benefits of the drug no longer outweighed its risk. Other companies with CB1 receptor antagonists in development have halted their programmes because of the uncertain path to marketing approval.We will not undertake any further in-house investment in V24343 and this programme will be discontinued.
The Group's partnering activities in 2008 were focused on V1512, our treatment for Parkinson's disease. Despite a significant effort and very broad interest in this late stage programme partnering has not yet been concluded with the commercial opportunity, timeline and cost of pursuing a Phase III programme all being cited as key considerations. To address these issues, we have evaluated an alternative 505(b)(2) filing strategy in the US and are exploring partnering on this revised approach. The Group acquired rights to this programme through its acquisition of Cita, which had licensed in from Chiesi, and consequently the Group's potential economic interest in the programme is substantially lower than for other programmes in its pipeline because of milestone and revenue shares payable.
Two of the Group's programmes are being developed by partners. V2006, which is partnered under the name BIIB014 with Biogen Idec, is in clinical development for Parkinson's Disease and NVP-AUY922, which is partnered with Novartis, is currently in a Phase I oncology study. In March 2009, Biogen Idec highlighted favourable top-line data from its two Phase IIa studies of V2006 and has noted that it is now developing a package to support registrational studies. Neither we nor Biogen Idec has publicised a target date for full study data becoming available nor the planned timing of progressing the programmes into later-stage studies. We expect an update from Novartis on progression of NVP-AUY922 in 2009.
Excellent progress has been made in 2008 in our late-stage research programmes where, since the year end, one pre-clinical candidate (V158866) has been selected from our FAAH programme and during 2009 we expect to be able to select a pre-clinical candidate from our Chk1 programme. We have also made good progress against our stated goal of substantially funding our research infrastructure with collaborations. In October 2008, we earned a €0.5 million milestone under our existing three-year collaboration with Servier against two undisclosed oncology targets. This collaboration provides staff funding, research and development milestones and royalties.
During 2008, a significant headcount reduction was implemented that consolidated research into Cambridge and reduced the size of the corporate infrastructure. A key element of our strategy to rebuild Shareholder value is to maintain a tight control on costs and to be as efficient as possible. Since the end of the year we have reviewed further the size of the corporate infrastructure, including the costs of being a public company. The outcome of that further review is that some additional heads will be eliminated from our corporate functions, savings will be made in external costs and as noted above we will reduce the size of our Board. We will continually evaluate the size of our infrastructure and adapt it to the business needs as necessary.
Looking forward to 2009, a key priority will be V3381 where we aim to complete recruitment of the Phase IIb neuropathic pain study by the end of the year and to make data available in 2010. We plan to partner V3381 following that Phase IIb data becoming available but will explore partnering options in parallel with the ongoing study. The other key programmes for in-house investment in 2009 are V158866, our novel pain compound targeting FAAH, and our late stage Chk1 oncology research programme for which we expect to announce a pre-clinical development candidate during this year.
Our 2009 partnering efforts will focus on V85546 and V1512 where we see the greatest potential to secure deals. We will also seek to partner V10153 but partnering this programme will be challenging.
The anticipated news flow for the Group's product development portfolio is summarised below, although these timings may be subject to change as a result of factors outside the control of the Group:
Forthcoming Anticipated Newsflow
|
|
Chk1 - enter pre-clinical |
2009 |
|
|
V3381 - Completion Phase IIb recruitment |
Year-end 2009 |
|
|
V1512 - possible partnering |
2009 |
|
|
NVP-AUY922 - start Phase II (Novartis) |
Undisclosed |
|
|
Hsp90 Oral - start Phase I (Novartis) |
Undisclosed |
|
|
V2006 (BIIB014): start registrational studies (Biogen Idec) |
Undisclosed |
|
|
V85546 - possible partnering |
2009-2010 |
|
|
V158866 - file IND / start Phase I |
2010 |
|
|
V3381 - Phase IIb results & possible partnering |
2010 |
Key business strengths
Vernalis is differentiated by a number of key strengths:
a) Strong and experienced management team
Following its restructuring, Vernalis established a high-quality management team under the leadership of Ian Garland, the Group's Chief Executive Officer, and David Mackney, the Chief Financial Officer. Ian and David previously led Acambis plc, the UK-based vaccine development company, culminating in a successful sale to Sanofi Pasteur. Ian also acted as Chief Financial Officer for Arrow Therapeutics, a privately-held UK anti-infectives company that was successfully sold to AstraZeneca. The team possesses the expertise and experience to build the value of the Group through its new strategy.
b) Extensive clinical pipeline addressing significant commercial opportunities
Vernalis has a broad pipeline of clinical and pre-clinical assets, totalling seven programmes in clinical development alone. These programmes comprise opportunities with market potential ranging from modest, niche opportunities to major commercial areas such as cancer, inflammatory diseases and neuropathic pain. The Directors believe the number of active programmes in the Group's clinical pipeline provides a measure of risk diversification in the event of any single product failure, while providing significant potential for future revenue opportunities.
c) Excellent partner validation
Vernalis has long-standing partnerships with the major pharmaceutical companies Novartis, for NVPAUY922 and Hsp90, and Biogen Idec, for V2006. These partnerships validate the Group's technology and therapeutic rationale and provide a potentially significant source of future income to Vernalis, in the form of milestones and future royalty income on product sales, with relatively little ongoing financial commitment by the Group.
d) Productive research engine
Vernalis has a productive research division with internationally recognised expertise for innovation in fragment-based hit discovery methods, effectively integrated with structure-guided medicinal chemistry. Vernalis' research division has a proven track record of early innovation and successful application of proprietary experimental methods in fragment and structure-based drug discovery, and has a demonstrated capability to generate multiple "lead" candidate series against a wide variety of drug targets.
The Group's research capabilities have been proven both by a high rate of productivity, which has seen five development candidates generated in the past five years, as well as by the calibre of pharmaceutical research partnerships which the Group has secured. Leads generated by the Group's research division potentially provide Vernalis with several future development and partnering opportunities.
Details of the Placing and Open Offer
Subject to the fulfilment of the certain conditions, Qualifying Shareholders are being given the opportunity to subscribe for New Ordinary Shares pro rata to their existing shareholdings at a price of 3 pence per New Ordinary Share (subject to the effect of the Share Capital Reorganisation) on the basis of:
11 New Ordinary Shares for every 5 Existing Ordinary Shares
held by Qualifying Shareholders and registered in their name at the Record Date.
Fractions of Ordinary Shares will not be allotted and each Qualifying Shareholder's entitlement under the Open Offer will be rounded down to the nearest whole number. The fractional entitlements will be aggregated and sold in the market on behalf of the relevant Shareholder, save that, where the net proceeds are less than £5.00 per relevant Shareholder (which it is expected will be the case), then the net proceeds of such sale will be retained for the benefit of the Company.
The Placing and Open Offer is conditional, inter alia, upon:
a) the passing of the Resolutions 1, 2, 4, 5, 6, 7, 8 and 9;
b) Admission becoming effective by not later than 8.00 a.m. on 19 May 2009 (or such later time and/or date as Piper Jaffray and the Company may agree, not being later than 8.00 a.m. on 2 June 2009); and
c) the Placing Agreement becoming unconditional in all respects.
Accordingly, if any of such conditions are not satisfied or, if applicable, waived, the Placing and Open Offer will not proceed and any Open Offer Entitlements admitted to CREST will thereafter be disabled.
The Placing and Open Offer Shares, when issued and fully paid, will rank in full for all dividends or other distributions declared, made or paid after Admission and in all other respects will rank pari passu with the Existing Ordinary Shares. No temporary documents of title will be issued. Application has been made for the Placing and Open Offer shares to be admitted to the Official List and to trading on the London Stock Exchange's main market for listed securities. It is expected that Admission will become effective on or around 19 May 2009 and that dealings for normal settlement in the Placing and Open Offer Shares will commence at 8.00 a.m. on the same day.
Share Capital Reorganisation
Subdivision and repurchase of "A" Deferred Shares
The Companies Act prohibits the Company from issuing ordinary shares at a price below their nominal value. The Directors believe that the current nominal value of the Existing Ordinary Shares being 5 pence per share, is high relative to the price at which Existing Ordinary Shares are currently traded on the London Stock Exchange and that consequently it is desirable to reduce the nominal value of each Existing Ordinary Share to 1 pence per share.
Resolution 1 to be proposed at the General Meeting, the notice of which is set out at the end of the prospectus to be sent to Shareholders, proposes that each issued Existing Ordinary Share of 5 pence in nominal value be subdivided into one Interim Ordinary Share of 1 pence in nominal value and one "A" Deferred Share of 4 pence in nominal value. In relation to the unissued Existing Ordinary Shares of 5 pence each in nominal value, Resolution 1 if passed at the General Meeting will subdivide each such share into 5 Interim Ordinary Shares of 1 pence each in nominal value. The Interim Ordinary Shares of 1 pence each so created will continue to carry the same rights as attach to the Existing Ordinary Shares of 5 pence each (save for the reduction in nominal value). The "A" Deferred Shares will be transferable only with the consent of the Company and will not be admitted to the Official List or to trading on the London Stock Exchange and will have the same rights as the existing Deferred Shares (save for the difference in nominal value). The Directors consider the "A" Deferred Shares so created to be of no economic value. The "A" Deferred Shares and the existing Deferred Shares in issue will, subject to Shareholder approval pursuant to Resolution 3 of the resolutions to be proposed at the General Meeting, be re-purchased by the Company for 1 pence in aggregate for all "A" Deferred Shares and 1 pence in aggregate for all Deferred Shares and following such repurchase will be cancelled. The repurchase of the "A" Deferred Shares and the existing Deferred Shares in issue will be financed out of the proceeds of the issue of two new Ordinary Shares by the Company to be subscribed by an existing Shareholder at a subscription price equal to the nominal value of such share.
Share Consolidation
The Company intends to consolidate the Interim Ordinary Shares on the basis of 1 Consolidated Ordinary Shares for every 20 Interim Ordinary Shares held.
The Directors believe that the proposed Share Consolidation is necessary in order to improve the marketability of the shares. Following the Share Consolidation, the Company will have 18,161,639 Consolidated Ordinary Shares in issue. The Board would like to make it clear that the number of shares held by Shareholders will be reduced by a factor of 20 times compared to that currently held, but that each share will have a higher nominal value. For example if a Shareholder has 100 Existing Ordinary Shares with a nominal value of 5 pence, after the Subdivision and the Share Consolidation, the Shareholder will have 5 Consolidated Ordinary Shares with a nominal value of 20 pence.
The Consolidated Ordinary Shares will have the same rights as the Existing Ordinary Shares including voting, dividend and other rights.
Where, as a result of the Share Consolidation, fractional entitlements arise, no fractions of shares will be issued but will be aggregated and sold in the market on behalf of the relevant Shareholder save that, where net proceeds are less than £5.00 per relevant Shareholder (which it is expected will be the case), then the net proceeds of such sale will be retained for the benefit of the Company.
No new certificates will be issued in respect of the Interim Ordinary Shares immediately following the Subdivision. New certificates in respect of both the Consolidated Ordinary Shares and the Placing and Open Offer Shares will be issued following the conclusion of the Placing and Open Offer. After despatch of definitive share certificates, certificates for Existing Ordinary Shares will cease to be valid for any purpose whatsoever.
Shareholders who hold their Existing Ordinary Shares in uncertificated form are expected to have their CREST accounts credited with the Consolidated Ordinary Shares on 19 May 2009.
For Shareholders who hold their Existing Ordinary Shares in certificated form share certificates for the Consolidated Ordinary Shares will be despatched by 27 May 2009. Temporary certificates of title will not be issued. Certificates for Existing Ordinary Shares will no longer be valid after 27 May 2009 and should be destroyed upon receipt of certificates in respect of the Consolidated Ordinary Shares. Pending despatch of the definitive certificates in respect of the Consolidated Ordinary Shares, transfers of Consolidated Ordinary Shares held in certificated form will be certified against the register.
Authority for the Share Consolidation will be sought by the proposal of Resolution 2 at the General Meeting.
Impact of the Share Consolidation on the Open Offer
As set out in paragraph 6 of the prospectus to be sent to Shareholders, the Open Offer is, in effect, being made to Qualifying Shareholders on the basis of 11 New Ordinary Shares for every 5 Existing Ordinary Shares.
You should note however, that as a result of the Share Capital Reorganisation, Shareholders will in fact receive 1 Consolidated Ordinary Share for every 20 New Ordinary Shares offered pursuant to the Placing and Open Offer and will in fact pay 60 pence per Consolidated Ordinary Share rather than 3 pence per New Ordinary Share.
Accounting for the Share Consolidation, the Open Offer is actually being made on the basis of:
11 Consolidated Ordinary Shares of 20 pence each for every
100 Existing Ordinary Shares of 5 pence each
and the Application Form and Open Offer Entitlements will be expressed in this form.
Related Party Transaction
Invesco Asset Management Ltd, which holds 91,274,683 Existing Ordinary Shares (representing approximately 25.13 per cent. of the existing issued ordinary share capital of the Company), has committed to take up, in full, its Open Offer Entitlements in respect of 200,804,302 New Ordinary Shares and has agreed to subscribe up to a further £3.2 million in aggregate for New Ordinary Shares under the Placing, subject to clawback to satisfy valid applications under the Open Offer (representing, assuming no clawback, in aggregate not more than 34.4 per cent. of the Enlarged Share Capital).
As a consequence of IAML's current interest in the Company, its proposed participation in the Placing is a related party transaction for the purposes of the Listing Rules which requires the prior approval of Independent Shareholders. IAML will abstain, and has undertaken to take all reasonable steps to ensure that its associates will abstain, from voting on the Related Party Resolution at the General Meeting.
Prospectus Available for Inspection
Copies of the Prospectus will be available to the public for inspection at the Document Viewing Facility, 25 The North Colonnade, Canary Wharf, London E14 5HS.
Placing and Open Offer Statistics
|
Offer Price |
3 pence |
|
Discount of Existing Ordinary Shares(1) |
25.9 per cent. |
|
Number of Existing Ordinary Shares in issue as at 28 April 2009 |
363,232,786 |
|
Number of Consolidated Ordinary Shares in issue as at 18 May 2009 |
|
|
(being the date immediately prior to Admission) |
18,161,639 |
|
Number of Consolidated Ordinary Shares to be issued |
|
|
pursuant to the Placing and Open Offer |
39,955,606 |
|
Number of Consolidated Shares in issue immediately upon completion of the |
|
|
Placing and Open Offer (2) |
58,117,245 |
|
Gross proceeds of the Placing and Open Offer |
£24.0 m |
|
Estimated net proceeds of the Placing and Open Offer receivable by the Company |
£22.1 m |
___________
(1) The discount is to the middle market price of Existing Ordinary Shares at the close of business on 28 April 2009,
being the latest practicable date prior to the announcement of the Placing and the Open Offer
(2) This assumes no further exercise of options under the Share Schemes.
Enquiries:
|
Vernalis plc |
+44 (0) 1189 899 300 |
|
Ian Garland / David Mackney |
|
|
Piper Jaffray |
020 3142 8700 |
|
Neil Mackison / Rupert Winckler / Jamie Adams |
|
|
Brunswick |
020 7404 5959 |
|
Jon Coles / Justine McIlroy / Annabel Entress |
Piper Jaffray Ltd., which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for the Company as sponsor, broker and underwriter in connection with the Placing and Open Offer and not for any other person and will not be responsible to any other person for providing the protections afforded to its customers or for providing advice in relation to the Placing and Open Offer, the contents of the Prospectus and, if relevant, the accompanying documents or any arrangements referred to therein.
This news release has been issued by Vernalis plc and is the sole responsibility of Vernalis plc.
The distribution of this announcement in certain jurisdictions may be restricted by law and such distribution could result in violation of the laws of such jurisdictions. In particular, this announcement is not for distribution in the United States, Australia, Canada, Japan or South Africa.
This announcement is not an offer of securities for sale in the United States. The Placing and Open Offer Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") or under the applicable securities laws of any state or other jurisdiction of the United States or qualified for distribution under any applicable securities laws in Canada, Australia, South Africa or Japan. The Placing and Open Offer Shares may not be offered or sold, directly or indirectly, within the United States absent registration or an exemption from registration under the Securities Act and in compliance with any applicable securities laws of the states of the United States. No public offering of the securities discussed herein is being made in the United States and the information contained herein does not constitute an offering of securities for sale in the United States, Canada, Australia, Japan or South Africa. This announcement is not for distribution directly or indirectly in or into the United States, Canada, Australia, Japan or South Africa.
Neither the Placing and Open Offer Shares, the related Prospectus, this announcement nor any other document connected with this Placing and Open Offer have been or will be approved or disapproved by the United States Securities and Exchange Commission or by the securities commissions of any state or other jurisdiction of the United States or any other regulatory authority, nor have any of the foregoing authorities or any securities commission passed upon or endorsed the merits of the offering of the Placing and Open Offer Shares. Any representation to the contrary is a criminal offence.
This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities. Any purchase of, or application for, the New Ordinary Shares should be made only on the basis of information contained in the Prospectus to be sent to Qualifying Shareholders shortly.
The delivery of this announcement shall not, under any circumstances, create any implication that there has been no change in the affairs of the Group since the date of this announcement nor that the information in it is correct as of any subsequent time.
This announcement may contain forward-looking statements that reflect the Group's current expectations regarding future events, including the clinical development and regulatory clearance of the Group's products, the Group's ability to find partners for the development and commercialisation of its products, the Group's liquidity and results of operations, as well as the Group's future capital raising activities. Forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors, including the success of the Group's research strategies, the applicability of the discoveries made therein, the successful and timely completion of clinical studies, the uncertainties related to the regulatory process, the ability of the Group to identify and agree beneficial terms with suitable partners for the commercialisation and/or development of its products, the acceptance of the Group's products by consumers and medical professionals, and the ability of the Group to identify and consummate suitable strategic and business combination transactions.
Definitions used in this announcement will have the same meaning as those used in the prospectus to be sent to shareholders, unless the context requires otherwise.
FOR PUBLICATION IN THE UNITED KINGDOM ONLY. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, SOUTH AFRICA AND JAPAN, OR INTO ANY OTHER JURISDICTION WHERE THE EXTENSION OR AVAILABILITY OF THE PLACING AND OPEN OFFER WOULD BREACH ANY APPLICABLE LAW.
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS AND INVESTORS SHOULD NOT SUBSCIBE FOR OR PURCHASE ANY SHARES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF INFORMATION IN THE PROSPECTUS TO BE PUBLISHED BY THE COMPANY IN CONNECTION WITH THE PROPOSED PLACING AND OPEN OFFER. COPIES OF THE PROSPECTUS WILL, FOLLLOWING PUBLICATION, BE AVAILABLE FROM THE COMPANY'S REGISTERED OFFICE.
Related Shares:
Vernalis PLC