Xenova To Raise GBP21 Million, Plans Capital Reorganisation
Wednesday November 26, 3:13 am ET
Edited Press Release
LONDON -(Dow Jones)- Xenova Group, the UK-based bio-pharmaceutical group, which focuses on the therapeutic areas of cancer and immune system disorders, said Wednesday that it is proposing to raise GBP21.1 million (GBP19.4 million net of expenses) through a U.K. placing, a U.S. private placement together with a one for 13 open offer of 18,760,169 units at 112.5 pence per unit.
The units comprise an aggregate of 187,601,690 offer shares and 56,280,507 warrants, with each unit comprising 10 offer shares and three warrants.
The compaany also said it plans a sub-division, conversion and redesignation of each issued existing ordinary share into one new ordinary share and nine deferred shares and a sub-division of each authorised but unissued existing ordinary share into ten new ordinary shares.
Subject to the approval of the High Court, the company plans to cancel the deferred shares, arising from the capital reorganisation, for no consideration.
The U.K. placing will be for 11,360,578 units and has been fully underwritten by Nomura. The U.S. private placement will be for 7,362,461 units.
David Oxlade, Chief Executive Officer commented: "Xenova has a broad pipeline of products in clinical development and partnerships with a number of significant pharmaceutical companies. With these funds, we now have the required capital to fund the first phase III trial of TransMIDTM and to progress the development of the company's later stage programmes."
The issue price represents the equivalent of a discount of 1.25 pence (10%) to the closing middle market price of 12.5 pence per issued existing ordinary share trading on the London Stock Exchange on Nov. 25 2003.
Xenova said it will use the proceeds from the offerings to progress the development of the Group's later stage and commercially more attractive clinical programmes in order to extract the greatest value and nearer-term benefits from the Group's product portfolio.
The Directors expect to enter into further licensing agreements with the prioritised drug programmes and, in addition, intend to pursue licensing opportunities for those programmes that have been deprioritised.
The Directors believe that the additional financial strength resulting from the offerings will also put the Group in a better position to negotiate favourable terms for its licensing agreements or other corporate transactions.
The Directors expect that losses and cash outflows will continue for a number of years. However, they believe that this fundraising will allow the Company to continue the development of its clinical programmes and to commercialise its products through licensees.
The company also said that if the offerings do not proceed, the Xenova Group would not have sufficient working capital, for at least the next 12 months from the date of publication of the Prospectus, to support its currently planned level of activities.
If the offerings do not proceed, the Group would need to take steps to reduce its activities in order to enable Xenova, on a standalone basis, to remain a going concern for at least the next 12 months from the date of the Prospectus.
Such steps would include a reduction in overheads and development expenditure on the Group's drug candidates which may delay, reduce or eliminate the development of product candidates which are not externally funded by partners, the company said.
In addition, the Group may also be forced to license the rights to some of its drug candidates and technologies at an earlier stage than would otherwise be intended, which would be likely to be on less favourable terms.
The aggregate net proceeds of the offerings are expected to be GBP19.4 million. The Directors currently estimate that GBP11 million will be invested in the first TransMIDTM Phase III clinical trial, GBP5 million invested in progressing the other prioritised clinical programmes and the remainder used for working capital.... |
