28th Jun 2006 07:41
Vectura Group PLC28 June 2006 NOT FOR DISTRIBUTION, IN WHOLE OR IN PART, INTO OR WITHIN THE UNITED STATES,CANADA, AUSTRALIA OR JAPAN Vectura Group plc Placing of 52,941,177 million shares at 85 per share raising £45.0 million Chippenham, UK, 28 June 2006 - Vectura Group plc (LSE: VEC) today announces itsintention to raise £42.9 million net of expenses in an over-subscribed Placingof new ordinary shares to institutional investors in the UK, mainland Europe andthe United States. The Placing is conditional upon, inter alia, the approval of shareholders. Acircular convening an EGM of the Company, which is expected to take place on 24July 2006, is being posted to shareholders. PLACING HIGHLIGHTS • Vectura to raise approximately £42.9 million (net of expenses) through theplacing of 52,941,177 Placing Shares at a Placing Price of 85 pence per share.The Placing is being fully underwritten by Piper Jaffray. • The Placing Price represents the closing mid-market price of 85 pence perordinary share as at 27 June 2006, the latest practicable date prior to theannouncement of the Placing. • The shares are being offered to new and certain existing institutionalshareholders to further widen the institutional shareholder base. • The funds raised will be used by the Company to create additional value fromits portfolio by taking key products further through development before seekingco-development deals, progressing certain products to regulatory submission, andby broadening the early stage pipeline. • The necessary authority required to issue and allot the Placing Sharespursuant to the Placing will be sought at an Extraordinary General Meetingconvened for 2.00pm on 24 July 2006. Commenting on the proposed Placing, Dr. Chris Blackwell, Chief Executive ofVectura, said: "This fundraising is a significant step forward for Vectura. Itfollows an extremely successful period in the history of the Company, in whichwe have demonstrated our ability to deliver on the objectives set out at IPO bytaking the key products in our pipeline to the next stages of development andestablishing three major licensing deals with international pharmaceuticalcompanies. We have been delighted by investor appetite for Vectura stock in thisover-subscribed fundraising, which we believe reflects our ongoing success andthe strong prospects for the Company. With the advancement of our product pipeline further enhanced by our ability tofinance Phase III trials for speciality orphan products, and the continuedinterest in our technologies from licensing partners, we are well placed togenerate further value for our shareholders." - Ends - There will be a conference call today at 8.30am UK time, for details please callClaire Rowell at Financial Dynamics, 0207 269 7285. Enquiries:Vectura Group plc Chris Blackwell, Chief Executive On 25/05/06 +44 (0) 207 831 3113,Anne Hyland, Chief Financial Officer thereafter +44 (0) 1249 667 700 Piper Jaffray LtdJamie Adams +44 (0) 207 743 8740Will Carnwath +44 (0) 207 743 8741 Financial Dynamics David Yates/Sarah MacLeod/John Gilbert +44 (0) 207 831 3113 Piper Jaffray Ltd. is nominated adviser and joint broker to the Company for thepurpose of the AIM Rules. Piper Jaffray Ltd., which is authorised and regulatedin the United Kingdom by the Financial Services Authority and is a member of theLondon Stock Exchange, is acting exclusively for the Company in relation to thePlacing. Piper Jaffray Ltd. is not acting for any other person in connectionwith the matters referred to in this announcement and will not be responsible toanyone other than the Company for providing the protections afforded to clientsof Piper Jaffray Ltd. or for giving advice in relation to the matters referredto in this announcement. This press announcement has been issued by the Company and is the soleresponsibility of the Company. This announcement has not been approved by PiperJaffray Ltd. for the purposes of section 21 of the Financial Services andMarkets Act 2000. This announcement does not constitute or form part of any offer to sell or issueor the solicitation of any offers to acquire, purchase or subscribe for sharesin any jurisdiction. This announcement is not an offer of securities for salein the United States. The new ordinary shares to be issued have not been andwill not be registered under the United States Securities Act of 1933 (asamended) (the "Securities Act") or the securities laws of any state or otherjurisdiction of the United States and new Ordinary Shares may not be offered orsold, directly or indirectly through CREST or otherwise within the UnitedStates, absent registration under the Securities Act or an exemption fromregistration. The Company does not intend to register any of its securities inthe United States or to conduct a public offering of securities in the UnitedStates. This announcement does not constitute or form part of any offer or invitation tosell or issue, or any solicitation of any offer to purchase or subscribe for,any securities in any jurisdiction. Copies of this announcement are not beingand must not be mailed or otherwise distributed or sent in or into or from theUnited States, Canada, Australia or Japan and any person receiving thisannouncement (including custodians, nominees and trustees) must not distributeor send it in or into or from the United States, Canada, Australia or Japan. The delivery of this announcement shall not under any circumstances create anyimplication that there has been no change in the affairs of the Group since thedate of this announcement or that the information in it is correct as of anysubsequent time. This announcement may contain forward-looking statements that reflect theGroup's current expectations regarding future events, including the clinicaldevelopment and regulatory clearance of the Group's products, the Group'sability to find partners for the development and commercialisation of itsproducts, on the Group's liquidity and results of operations, as well as theGroup's future capital raising activities. Forward-looking statements involverisks and uncertainties. Actual events could differ materially from thoseprojected herein and depend on a number of factors, including the success of theGroup's strategies, the applicability of the discoveries made therein, thesuccessful and timely completion of clinical studies, the uncertainties relatedto the regulatory process, the successful integration of completed mergers andacquisitions and achievement of expected synergies from such transactions, theability of the Group to identify and consummate suitable strategic and businesscombination transactions. Notes to Editors: Vectura's principal focus is to develop a range of inhaled drugs for thetreatment of both lung diseases and other conditions where optimised deliveryvia the lungs provides significant benefits, such as fast action, improvedefficacy and tolerability compared with current therapies. Vectura's products combine its proprietary, innovative, pulmonary formulationand device technologies (Aspirair(R), GyroHaler(R), and PowderHale(R)) withexisting, off-patent drugs either for use in new indications or to provideinhalation as an improved route of administration. Using drugs that have alreadybeen approved in some form in at least one major pharmaceutical market lowersthe risk of product development failure compared to new chemical entities.Vectura is able to secure patent protection for its portfolio by identifying newindications for off-patent compounds and applying the Company's proprietarydelivery technologies to create new methods of administration. The Company has development collaborations with Boehringer Ingelheim, Novartis,GSK, Chiesi and one other undisclosed international pharmaceutical company. For further information, please visit Vectura's website at www.vectura.com VECTURA GROUP PLC ("THE COMPANY" OR "VECTURA") Placing of 52,941,177 shares (the "Placing Shares") at 85 pence per share (the "Placing Price") raising £45.0 million ( the "Placing") REASONS FOR THE FUNDRAISING Since the Company was admitted to trading on AIM in July 2004, it has completedthree major licensing deals. These deals have provided confirmation of thestrength of the product pipeline and the pulmonary technologies. As part ofthese licensing agreements, each partner has requested the continued support ofVectura's scientists which provides additional validation of the Group'sexpertise in the field of inhalation. The high value of the deals and the validation of the technologies lead theBoard to believe that strategic value and greater returns can be realised if theGroup invests further in its products and technologies. The further investmentwill be made in the product pipeline as well as Vectura's device technologiesthat underlie both the VR315 and the Boehringer Ingelheim agreements. The proposed product development expenditure is primarily planned forco-development opportunities where Vectura would seek to retain additionalrights for certain territories or products with Orphan Drug Status, where theinvestment in later stage clinical trials is lower than for other products. PROPOSED USE OF PROCEEDS • Co-development of VR315 for US and other territories - approximately 35 percent. of the funds to be raised Vectura signed a European collaboration, development and licence agreement witha leading international pharmaceutical company for VR315, a combination asthmatherapy. Under this agreement, VR315 will be developed as a generic combinationproduct, delivered using GyroHaler. The agreement covers Europe and certain other countries, with Vectura retainingthe rights for the US, Japan, Canada, South America, Australia, New Zealand andsome other territories. Under the terms of the agreement Vectura will be responsible for the furtherformulation development of VR315 and supply of the GyroHaler device. Vectura'spartner will be responsible for the clinical development, manufacture andEuropean marketing of the product. The Group will have access to all clinicaldata and the partner intends to provide, if requested, US-compliantmanufacturing facilities for the blister filling and assembly of VR315 fornon-European territories. Combination therapy is the biggest and fastest growing sector of the asthmamarket with annual sales currently exceeding $6 billion and non-European annualsales estimated at approximately $4.5 billion. The non-European market thereforeprovides a very significant opportunity. The Directors believe that, with the validation from the European deal, Vecturawill be an attractive partner for large generic companies in the US and otherterritories and the Group's ability to co-fund the development will enableVectura to retain a substantial proportion of the product value. Vectura is currently in discussions with potential co-development partners,which are expected to conclude in H2 2006. The funds are required for Vectura'sshare in the costs of development work required to prove equivalence prior tofiling for marketing approval. The Group will also need to invest in third partymanufacturing facilities for the GyroHaler device. As part of such an agreement,the Directors would expect to retain a significant share of the future potentialrevenues from the product. • Develop VR040 to registration - approximately 30 per cent. of the funds to beraised Vectura strengthened its product pipeline during 2005 by introducingVR040 (inhaled apomorphine hydrochloride) for Parkinson's disease (PD) which iscurrently in a Phase IIa proof-of-concept study in 24 patients. Patients with advanced stage PD often experience unpredictable "offepisodes" of sudden onset that severely compromise their ability to performroutine daily activities and negatively impact their quality of life. These canoccur several times a day resulting in patients suffering lack of co-ordination,inability to move or communicate coherently, muscle cramps, musculoskeletalpain, and associated cognitive slowing. Apomorphine has been used for over half a century, primarily in thetreatment of advanced PD, but administered subcutaneously. VR040 has thepotential to reduce the therapeutic dose required, and this should reduce theincidence of unwanted side-effects when compared with other approaches used todeliver apomorphine. With its expected rapid benefit within minutes ofinhalation and non-invasive route of administration, VR040 has the potential tosatisfy significant unmet patient needs. It is estimated that approximately 1 million people in Europe and 1.5million in the US have PD; approximately 10 per cent. of these experience severeon/off motor fluctuations unresponsive to therapies other than apomorphine. In January 2006, the Group received notification from the EMEA that VR040had been granted orphan drug designation for the treatment of ''off episodes''in patients with PD who are unresponsive to standard therapies. The net proceeds of the Placing will allow the Group to retain a higherproportion of the value of VR040 by progressing its development through PhaseIII trials prior to licensing. The funds will be used to carry out Phase IIb and Phase III clinicaltrials, trials with comparator products and additional work to facilitate themanufacture of larger drug batches. The orphan nature of the target indicationgenerally allows the use of smaller numbers of patients in clinical trials.Vectura currently expects to commence the Phase IIb trial in H1 2007, with thePhase III trial currently expected to commence following approximately 18 monthsthereafter. • Development of a second multi-dose dry powder inhaler device - approximately20 per cent. of the funds to be raised There is a growing demand for dry powder inhalers, particularly those that candeliver high performance and consistent doses. The Directors believe thatVectura's device technology and engineering expertise is well placed to capturesignificant market share as the Group's devices can provide critical benefitswhich are required by both patients and regulatory authorities. In April 2006 Vectura agreed a non-exclusive worldwide collaboration,development and licensing agreement with Boehringer Ingelheim International GmbH("Boehringer Ingelheim") to develop a dry powder inhaler (DPI) as a tailoredBoehringer Ingelheim device. It will be used to deliver a range of BoehringerIngelheim's proprietary respiratory products, mainly for treating asthma andchronic obstructive pulmonary disease (COPD). Vectura intends to develop a new DPI device for this market. Most treatments forasthma and COPD are delivered by inhalation. Global markets for these treatmentsare valued in excess of $17 billion today and are forecast to grow to over $28billion by 2010. Dry powder inhalers are increasingly the being used forpatients with these diseases and it is expected that DPIs will be used todeliver the majority of the drugs sold in these markets by 2010. The secondmulti-dose dry powder inhaler device which the Company proposes to develop willbe differentiated from the device tailored for Boehringer Ingelheim, and Vecturawill use the new device primarily for developing selected respiratory products.It will also be available for co-development and technology licensingopportunities with third parties. The Group will use the funds for the additional development work and contractmanufacturing for the device and its assembly. • Further strengthening of product pipeline - approximately 15 per cent. of thefunds to be raised Vectura is discussing with several pharmaceutical and biotechnology companiesthe potential for the Group's technologies to drive development of new optimisedproducts, with discussions focused on respiratory and neurological therapeutictargets. These opportunities involve either co-development or in-licensing of productsthat have completed their core pre-clinical evaluation. The Group will use thefunds to complete pre-clinical development work using proprietary technologies,for the in-licensing payments where necessary, and to fund clinical trials. DETAILS OF THE PLACING The Company has entered into a placing agreement with Piper Jaffray (the "Placing Agreement"), pursuant to which Piper Jaffray has agreed (as theCompany's agent) to use reasonable endeavours to procure placees for the PlacingShares at the Placing Price. The Placing Price of 85 pence per Placing Sharerepresents the closing mid-market price on 27 June 2006, being the latestpracticable date prior to this announcement. The Placing, which Piper Jaffray has fully underwritten, is conditional on,inter alia : • the approval of the resolution authorising the allotment of the Placing Shareswhich is being proposed at the EGM; • the Placing Agreement becoming unconditional in all respects and not havingbeen terminated in accordance with its terms; and • admission of the Placing Shares. The Placing Shares will be issued credited as fully paid and will be identicalto and rank pari passu in all respects with the existing ordinary shares of theCompany, including the right to receive all future distributions, declared, paidor made in respect of the ordinary shares of the Company from the date ofAdmission. The Placing Shares represent approximately 31.5 per cent. of theenlarged issued ordinary share capital of the Company following the Placing. To broaden Vectura's institutional shareholder base and to minimise thetransaction costs of the offering, the Placing Shares are only being offered toa number of existing and new institutional shareholders. The Placing Shares arenot being made available to the public. Application will be made to the LondonStock Exchange for the Placing Shares to be admitted to trading on AIM.Admission is expected to become effective, and dealings in the Placing Shares tocommence, on 25 July 2006. PLACING STATISTICS Placing Price 85pTotal number of Placing Shares being issued pursuant to the Placing 52,941,177Number of ordinary shares in issue following the Placing 168,210,858Market capitalisation following the Placing at the Placing Price £143.0 millionEstimated gross proceeds of the Placing £45.0 millionEstimated net cash proceeds of the Placing to be received by the Company £42.9 million EXPECTED TIMETABLE OF KEY EVENTS 2006Latest time and date for receipt of Forms of Proxy for the Extraordinary 2.00 p.m. on 22 JulyGeneral Meeting Extraordinary General Meeting 2.00 p.m. on 24 July Dealings to commence in the Placing Shares 25 July Placing Shares in uncertificated form to be credited to CREST accounts 28 July(qualifying CREST shareholders only) Definitive certificates for Placing Shares in certificated form to be 4 Augustdispatched (qualifying non CREST shareholders only) by Piper Jaffray Ltd. is nominated adviser and joint broker to the Company for thepurpose of the AIM Rules. Piper Jaffray Ltd., which is authorised and regulatedin the United Kingdom by the Financial Services Authority and is a member of theLondon Stock Exchange, is acting exclusively for the Company in relation to thePlacing. Piper Jaffray Ltd. is not acting for any other person in connectionwith the matters referred to in this announcement and will not be responsible toanyone other than the Company for providing the protections afforded to clientsof Piper Jaffray Ltd. or for giving advice in relation to the matters referredto in this announcement. This press announcement has been issued by the Company and is the soleresponsibility of the Company. This announcement has not been approved by PiperJaffray Ltd. for the purposes of section 21 of the Financial Services andMarkets Act 2000. This announcement does not constitute or form part of any offer to sell or issueor the solicitation of any offers to acquire, purchase or subscribe for sharesin any jurisdiction. This announcement is not an offer of securities for salein the United States. The new ordinary shares to be issued have not been andwill not be registered under the United States Securities Act of 1933 (asamended) (the "Securities Act") or the securities laws of any state or otherjurisdiction of the United States and new Ordinary Shares may not be offered orsold, directly or indirectly through CREST or otherwise within the UnitedStates, absent registration under the Securities Act or an exemption fromregistration. The Company does not intend to register any of its securities inthe United States or to conduct a public offering of securities in the UnitedStates. This announcement does not constitute or form part of any offer or invitation tosell or issue, or any solicitation of any offer to purchase or subscribe for,any securities in any jurisdiction. Copies of this announcement are not beingand must not be mailed or otherwise distributed or sent in or into or from theUnited States, Canada, Australia or Japan and any person receiving thisannouncement (including custodians, nominees and trustees) must not distributeor send it in or into or from the United States, Canada, Australia or Japan. The delivery of this announcement shall not under any circumstances create anyimplication that there has been no change in the affairs of the Group since thedate of this announcement or that the information in it is correct as of anysubsequent time. This announcement may contain forward-looking statements that reflect theGroup's current expectations regarding future events, including the clinicaldevelopment and regulatory clearance of the Group's products, the Group'sability to find partners for the development and commercialisation of itsproducts, on the Group's liquidity and results of operations, as well as theGroup's future capital raising activities. Forward-looking statements involverisks and uncertainties. Actual events could differ materially from thoseprojected herein and depend on a number of factors, including the success of theGroup's strategies, the applicability of the discoveries made therein, thesuccessful and timely completion of clinical studies, the uncertainties relatedto the regulatory process, the successful integration of completed mergers andacquisitions and achievement of expected synergies from such transactions, theability of the Group to identify and consummate suitable strategic and businesscombination transactions. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
VEC.L