Sutro Biopharma to Participate in the Cowen 41st Annual Healthcare Conference

On February 23, 2021 Sutro Biopharma, Inc. (NASDAQ: STRO), a clinical-stage drug discovery, development and manufacturing company focused on the application of precise protein engineering and rational design to create next-generation cancer and autoimmune therapeutics, reported that Bill Newell, Chief Executive Officer, will participate in the Ovarian Cancer Panel discussion at the Cowen 41st Annual Healthcare Conference on Tuesday, March 2, 2021, at 12:50 p.m. ET / 9:50 a.m. PT and, along with members of Sutro’s senior management team, will conduct one-on-one meetings with members of the investment community (Press release, Sutro Biopharma, FEB 23, 2021, View Source [SID1234575429]). The Ovarian Cancer Panel will stream live on the Cowen conference website.

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AMR Action Fund Gets First CEO, Funding Boost

On February 23, 2021 Microbiologist Henry Skinner, formerly of Novartis and Tekla Capital, reported it has been announced as the first CEO of the AMR Action Fund, a joint venture aimed at strengthening and accelerating clinical research of new, innovative antibiotics to address the rising issue of antimicrobial resistance (AMR) (Press release, EVERSANA, FEB 23, 2021, View Source [SID1234575454]).

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Through the joint efforts of the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA), the European Investment Bank, and Wellcome Trust, the AMR Action Fund first launched in July 2020 with $1 billion in funding with the goal of bringing four new antibiotics to patients by 2030.

Skinner stated, "I am honored to join the AMR Action Fund and its incredibly important mission. Having worked on this issue from many angles throughout my career, I know how badly novel antibiotics are needed, and I also know how many obstacles currently prevent them from being developed and reaching patients. I am proud and excited to lead the AMR Action Fund in its efforts to tackle the global challenge of AMR. Thank you to everyone involved in developing this critical and groundbreaking initiative, and in particular to the interim CEO of the AMR Action Fund, Martin Bott, for getting us to this point."

The Fund is poised to "take its first steps" in investing in biotech companies focused on developing new antibodies.

At the same time as Skinner was confirmed as CEO, it was announced that the fund had received an additional $140 million in funding from Boehringer Ingelheim Foundation, the European Investment Bank, and Wellcome Trust.

Christoph Boehringer, Chairman of the Boehringer Ingelheim Foundation, commented, "We need innovative solutions to avert the looming health crisis posed by AMR, which threatens to make even common medical procedures potentially deadly. The Boehringer Ingelheim Foundation is committed to fighting the greatest global health threats of our time and we are proud to join this broad alliance of charitable organizations, development banks, and biopharmaceutical companies. We are confident the AMR Action Fund will enable researchers and scientists to bring innovative antibiotics to patients suffering from severe bacterial infections."

The Fund noted that, while additional funding serves as a short-term solution to AMR, longer term policies are necessary to boost the pipeline of new antibiotics.

Leidos Holdings, Inc. Reports Fourth Quarter and Fiscal Year 2020 Results

On February 23, 2021 Leidos Holdings, Inc. (NYSE: LDOS), a FORTUNE 500 science and technology leader, reported financial results for the fourth quarter and fiscal year 2020 (Press release, Leidos, FEB 23, 2021, View Source [SID1234575470]).

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Roger Krone, Leidos Chairman and Chief Executive Officer, commented: "Fourth quarter results reflect the resilience of our growing portfolio with new record levels of revenue and backlog, coupled with margin expansion and further balance sheet optimization. This performance positions us for above-market growth in 2021, fueled by our talented diverse workforce who continue to engineer and deliver technologically innovative and secure solutions for our customers’ evolving needs."

Fourth Quarter Summary Results

Revenues for the quarter were $3.25 billion, compared to $2.95 billion in the prior year quarter, reflecting a 10.1% increase. Revenues for the quarter included $300 million and $89 million related to the acquisitions of Dynetics, Inc. ("Dynetics") and L3Harris Technologies’ security detection and automation businesses (the "SD&A Businesses"), respectively.

Operating income for the quarter was $299 million, compared to $261 million in the prior year quarter. Operating income margin increased to 9.2% from 8.8% in the prior year quarter. Non-GAAP operating margin for the quarter was 10.7%, compared to 10.5% in the prior year quarter, primarily due to favorable margin performance on certain contracts and higher margins on certain program wins.

Diluted earnings per share ("EPS") attributable to Leidos common stockholders for the quarter was $1.37, compared to $1.26 in the prior year quarter. Non-GAAP diluted EPS for the fourth quarter was $1.63 compared to $1.51 in the prior year quarter. The weighted average diluted share count for the quarter was 144 million, consistent with the prior year quarter.

Defense Solutions

Defense Solutions revenues for the quarter of $1.93 billion increased $273 million, or 16.5%, compared to the prior year quarter. The revenue growth was primarily attributable to $300 million of revenues related to the acquisition of Dynetics and program wins, partially offset by a net decrease in volumes on certain programs and the completion of certain contracts.

Defense Solutions operating income margin for the quarter was 7.6%, compared to 8.9% in the prior year quarter. On a non-GAAP basis, operating margin for the quarter was 8.9%, compared to 9.8% in the prior year quarter, primarily attributable to the release of a contract reserve in the prior year quarter, a net decrease in volumes on certain programs and the completion of certain contracts, partially offset by higher margins on certain program wins.

Civil

Civil revenues for the quarter of $811 million increased $38 million, or 4.9%, compared to the prior year quarter. The revenue growth was primarily attributable to $89 million of revenues related to the acquisition of the SD&A Businesses and program wins, partially offset by a net decrease in volumes on certain programs, including negative impacts on certain contracts due to the coronavirus pandemic ("COVID-19"), and the completion of certain contracts.

Civil operating income margin for the quarter was 11.0%, compared to 9.6% in the prior year quarter. On a non-GAAP basis, operating margin for the quarter was 12.3%, compared to 12.0% in the prior year quarter, primarily attributable to favorable product mix and higher margins on certain program wins.

Health

Health revenues for the quarter of $513 million decreased $13 million, or 2.5%, as compared to the prior year quarter. The revenue decline was primarily attributable to a net decrease in volumes on certain programs and the completion of certain contracts, partially offset by recoveries on certain programs previously delayed due to COVID-19.

Health operating income margin for the quarter was 16.8%, compared to 13.9% in the prior year quarter. On a non-GAAP basis, operating margin for the quarter was 18.5%, compared to 16.0% in the prior year quarter, primarily attributable to favorable volume and margin performance on certain contracts.

Fiscal Year 2020 Summary Results

Revenues for fiscal year 2020 were $12.30 billion, compared to $11.09 billion in the prior year, reflecting a 10.8% increase. Revenues for the fiscal year included $937 million and $243 million related to the acquisitions of Dynetics and the SD&A Businesses, respectively.

Operating income for fiscal year 2020 was $998 million, compared to $912 million in the prior year. Operating income margin for fiscal year 2020 was 8.1%, compared to 8.2% in the prior year. Non-GAAP operating margin was 10.1%, compared to 9.9% in the prior year, primarily due to a net gain recognized upon the receipt of proceeds related to the VirnetX, Inc. ("VirnetX") legal matter, higher margins on certain program wins and lower indirect expenditures due to cost reduction efforts in response to COVID-19. This was partially offset by negative impacts from reduced volume on certain contracts due to COVID-19 and a net gain recognized upon the receipt of the Greek arbitration award in the prior year.

Diluted EPS attributable to Leidos common stockholders for fiscal year 2020 was $4.36, compared to $4.60 for the prior year. Non-GAAP diluted EPS for fiscal year 2020 was $5.83, compared to $5.17 in the prior year. The diluted share count was 144 million compared to 145 million in the prior year.

Defense Solutions

Defense Solutions revenues of $7.34 billion for fiscal year 2020 increased $1.04 billion, or 16.5%, compared to the prior year. The revenue growth was primarily attributable to $937 million of revenues related to the acquisition of Dynetics, program wins and a net increase in materials volume on certain programs. This was partially offset by the completion of certain contracts and negative impacts from reduced volume on certain contracts due to COVID-19.

Defense Solutions operating income margin for fiscal year 2020 was 6.9%, compared to 7.5% in the prior year. On a non-GAAP basis, operating margin for the year was 8.2% compared to 8.5% in the prior year, primarily attributable to negative impacts from reduced volume on certain contracts due to COVID-19, partially offset by higher margins on certain program wins and lower indirect expenditures.

Civil

Civil revenues of $2.99 billion for fiscal year 2020 increased $198 million, or 7.1%, compared to the prior year. The revenue growth was primarily attributable to $243 million of revenues related to the acquisition of the SD&A Businesses and program wins. This was partially offset by the completion of certain contracts and negative impacts from reduced volume on certain contracts due to COVID-19.

Civil operating income margin for fiscal year 2020 was 9.4%, compared to 8.3% in the prior year. On a non-GAAP basis, operating margin for the year was 11.7%, compared to 10.9% in the prior year, primarily attributable to a decrease in bad debt expense and higher margins on certain program wins, partially offset by the completion of certain contracts.

Health

Health revenues of $1.96 billion for fiscal year 2020 decreased $36 million, or 1.8%, compared to the prior year. The revenue decline was primarily attributable to the timing of program execution due to COVID-19, the impact from the sale of our health staff augmentation business in the prior year and the completion of certain contracts. This was partially offset by a net increase in volumes on certain programs, program wins and the impact from our acquisition of IMX Medical Management Services, Inc. ("IMX") in the prior year.

Health operating income margin for fiscal year 2020 was 12.0%, compared to 12.1% in the prior year. On a non-GAAP basis, operating margin for the year was 14.4%, compared to 14.3% in the prior year, primarily attributable to increased volume on certain higher margin contracts, partially offset by reduced volume on certain managed service contracts with fixed cost infrastructures that were impacted by COVID-19.

Cash Flow Summary

Net cash used in operating activities for the quarter were $52 million compared to $169 million net cash provided by operating activities in the prior year quarter. The higher operating cash outflows were primarily due to the sale of accounts receivable in the prior quarter that did not recur in the current quarter and the timing of payroll payments.

Net cash used in investing activities for the quarter were $101 million compared to $54 million in the prior year quarter. The higher cash outflows were primarily due to cash paid related to the acquisition of the SD&A Businesses.

Net cash provided by financing activities for the quarter were $98 million compared to $144 million net cash used in financing activities in the prior year quarter. The higher cash inflows were primarily due to proceeds received related to the issuance of our $1.0 billion senior notes and the timing of dividend payments, partially offset by principal payments related to refinancing of outstanding debt and higher stock repurchases in the current year quarter.

Net cash provided by operating activities for the fiscal year were $1,334 million compared to $992 million in the prior year. The higher operating cash inflows were primarily due to the timing of payroll payments, including the deferral of tax payments under the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"), and the receipt of proceeds related to the VirnetX legal matter.

Net cash used in investing activities for the fiscal year were $2,815 million compared to $65 million net cash provided by investing activities in the prior year. The higher cash outflows were primarily due to net cash paid related to the acquisitions of Dynetics and the SD&A Businesses, net proceeds received in the prior year for the disposition of our commercial cybersecurity and health staff augmentation businesses and the sale of real estate properties and higher purchases of equipment and leasehold improvements associated with our new global headquarters. This was partially offset by cash paid related to the acquisition of IMX in the prior year.

Net cash provided by financing activities for the fiscal year were $1,451 million compared to $709 million net cash used in financing activities in the prior year. The increase in financing cash inflows were primarily due to proceeds received related to the refinancing and issuance of new debt and higher stock repurchases in the prior year. This was partially offset by principal repayments of outstanding debt and the retirement of the $450 million senior notes in the current year.

As of January 1, 2021, the Company had $524 million in cash and cash equivalents and $4.7 billion in debt.

New Business Awards

Net bookings totaled $3.3 billion in the fourth quarter of fiscal year 2020 and $17.8 billion for fiscal year 2020, representing a book-to-bill ratio of 1.0 and 1.4 for the fourth quarter and fiscal year 2020, respectively.

Notable recent awards received include:

Next Generation Enterprise Network Service Management : The Company was awarded a prime contract by the Naval Information Warfare Systems Command, formerly known as the Space and Naval Warfare Systems Command, to provide global network services under the Next Generation Enterprise Network Re-compete Service Management, Integration & Transport contract. Under the contract, Leidos will unify, operate and maintain the shore-based networks and data management for the Department of the Navy’s Program Executive Office Digital to improve capability and service under one enterprise network construct. The single award, indefinite delivery/indefinite quantity, firm-fixed-price and cost-plus contract has a five-year base period of performance followed by three one-year option periods, and an approximate value of $7.7 billion, if all options are exercised.
Special Operations Command Tactical Airborne Multi-Sensor Platforms Support : The Company was awarded a task order by Army Contracting Command – Aberdeen Proving Ground under the Responsive Strategic Sourcing for Services indefinite delivery/indefinite quantity contract. Under the contract, Leidos will provide pilot services, airborne sensor operators, hub and spoke operations/excursion support, staffing for the Intelligence Coordination Center, system training, logistics, aircraft and primary mission equipment maintenance and integration, configuration management and engineering support services in support of the program’s DHC- 8 and King Air 300 aircraft. The award has a total value of $649 million and includes a one-year base period of performance followed by four one-year option periods.
U.S. Intelligence Community : The Company was awarded contracts valued at $304 million, if all options are exercised, by U.S. national security and intelligence clients. Though the specific nature of these contracts is classified, they all encompass mission-critical services that help to counter global threats and strengthen national security.
The Company’s backlog at the end of fiscal year 2020 was $31.9 billion, of which $6.6 billion was funded.

Intent to Acquire Gibbs & Cox, Inc.

Consistent with Leidos strategy to add capabilities and deepen customer relationships, the Company has entered into a definitive agreement to acquire Gibbs & Cox, Inc. ("Gibbs & Cox"), the largest, full-service independent engineering and design firm specializing in naval architecture and marine engineering, for $380 million in cash. Headquartered in Arlington, Virginia, Gibbs & Cox has 525 employees. Over its 90 plus year history, Gibbs & Cox has remained a leader in maritime innovation and is on the frontlines of providing maritime solutions. The deal extends Leidos into an attractive maritime market where Leidos is under-penetrated today, and adds valuable engineering talent (naval architects and digital engineers) to the team. It further positions Leidos for long-term growth in the maritime unmanned market – a market requiring tight integration of ship design and autonomy systems. The transaction is expected to close in the second quarter of fiscal year 2021, subject to satisfaction of customary closing conditions.

Forward Guidance

The Company’s outlook for fiscal year 2021, which excludes the announced acquisition of Gibbs & Cox, is as follows:

Revenues of $13.7 billion to $14.1 billion;
Adjusted EBITDA margins of 10.3% to 10.5%;
Non-GAAP diluted EPS of $6.15 to $6.45; and
Cash flows provided by operating activities at or above $850 million.
Non-GAAP diluted EPS excludes amortization of acquired intangible assets, asset impairment charges, acquisition, integration and restructuring costs, amortization of equity method investment, gain on sale of business, acquisition related financing costs, loss on debt modification and other tax adjustments. For additional information regarding non-GAAP diluted EPS and Leidos’ other non-GAAP financial measures, see the related explanations and reconciliations to GAAP measures included elsewhere in this release.

The Company does not provide a reconciliation of forward-looking adjusted EBITDA margins (non-GAAP) or non-GAAP diluted EPS to GAAP net income, due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. Because certain deductions for non-GAAP exclusions used to calculate projected net income may vary significantly based on actual events, the Company is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income at this time. The amounts of these deductions may be material and, therefore, could result in projected GAAP net income and diluted EPS being materially less than projected adjusted EBITDA margins (non-GAAP) and non-GAAP diluted EPS.

COVID-19

The COVID-19 pandemic is affecting major economic and financial markets, and effectively all industries and governments are facing challenges, which has resulted in a period of business disruption, the length and severity of which cannot be predicted. The pandemic has resulted in significant travel restrictions, government orders to "shelter-in-place", quarantine restrictions and significant disruption of the financial markets. We have acted to protect the health and safety of our employees, comply with workplace health and safety regulations and work with our customers to minimize disruptions. The pandemic has impacted each of our groups, primarily in access to customer sites, travel restrictions, limitations of remote work and COVID-19 related costs.

Consistent with federal, state and local guidance, we perform work that is essential to support the critical infrastructure of the United States, the Defense Industrial Base and healthcare sector, and we continue to operate in support of our customers. We have taken steps to support increased teleworking and safe workplace environments. We have some minor business operations that are not designated as critical infrastructure and therefore have been required to operate in minimal conditions.

For the quarter and fiscal year 2020, COVID-19 adversely impacted revenues by approximately $12 million and $198 million, respectively, and impacted operating income by approximately $8 million and $96 million, respectively, as compared to prior year results. Within our Health segment we saw recoveries in the fourth quarter of fiscal year 2020 and continue to expect to see further recoveries in fiscal year 2021. Our Defense Solutions segment experienced less of a negative impact in the fourth quarter of fiscal year 2020 than in previous quarters. We also experienced lower indirect expenditures for fiscal year 2020 as a result of COVID-19 which partially offset the operating income impact on our programs. The full extent of the impact of the COVID-19 pandemic on our operational and financial performance, including our ability to execute on programs in the expected timeframe, will depend on future developments, including the duration and spread of the pandemic and the distribution and efficacy of vaccines, all of which are uncertain and cannot be predicted.

The CARES Act, which is effective until March 31, 2021, enabled us to defer payment of the employer portion of social security taxes. As of January 1, 2021, we deferred $123 million of employer social security tax payments and received $12 million from the Employee Retention Credit.

We have taken measures to protect the health and well-being of our workforce and are working with our customers to minimize the delay and disruption of the award and performance on our contracts. Many of our employees continue to work remotely while our offices remain open with limited capacity.

Conference Call Information

Leidos management will discuss operations and financial results in an earnings conference call beginning at 8 A.M. eastern on February 23, 2021. Analysts and institutional investors may participate by dialing +1 (877) 869-3847 (U.S. dial-in) or +1 (201) 689-8261 (international dial-in).

A live audio broadcast of the conference call along with a supplemental presentation will be available to the public through links on the Leidos Investor Relations website (View Source).

Odonate Therapeutics Announces Financial Results for the Three and Twelve Months Ended December 31, 2020

On February 23, 2021 Odonate Therapeutics, Inc. (NASDAQ: ODT), a pharmaceutical company dedicated to the development of best-in-class therapeutics that improve and extend the lives of patients with cancer, reported financial results for the three and twelve months ended December 31, 2020 (Press release, Odonate Therapeutics, FEB 23, 2021, View Source [SID1234575486]).

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As of December 31, 2020, Odonate had $157.3 million in cash, compared to $180.5 million as of December 31, 2019. This decrease in cash resulted primarily from cash used in operating activities for the twelve months ended December 31, 2020 of $113.1 million, partially offset by the receipt of $87.4 million of net proceeds from Odonate’s September 2020 underwritten public offering. Odonate’s net loss for the three and twelve months ended December 31, 2020 was $32.3 million and $126.4 million, or $0.87 and $3.84 per share, respectively, compared to $27.9 million and $111.8 million, or $0.91 and $4.05 per share, respectively, for the same periods in 2019.

"Positive results of CONTESSA, Odonate’s Phase 3 study investigating tesetaxel as a potential treatment for patients with metastatic breast cancer, were recently presented at the 2020 San Antonio Breast Cancer Symposium," said Kevin Tang, Chief Executive Officer of Odonate. "We continue to plan to submit a New Drug Application for tesetaxel to the FDA in mid-2021."

About Tesetaxel

Tesetaxel is an investigational, orally administered chemotherapy agent that belongs to a class of drugs known as taxanes, which are widely used in the treatment of cancer. Tesetaxel has several properties that make it unique among taxanes, including: oral administration with a low pill burden; a long (~8-day) terminal plasma half-life in humans, enabling the maintenance of adequate drug levels with relatively infrequent dosing; no history of hypersensitivity (allergic) reactions; and significant activity against chemotherapy-resistant tumors. In patients with metastatic breast cancer (MBC), tesetaxel was shown to have significant, single-agent antitumor activity in two multicenter, Phase 2 studies. Tesetaxel currently is the subject of three studies in MBC, including a multinational, multicenter, randomized, Phase 3 study in patients with MBC, known as CONTESSA. Positive results of CONTESSA were presented at the 2020 San Antonio Breast Cancer Symposium in December.

About CONTESSA

CONTESSA is a multinational, multicenter, randomized, Phase 3 study of tesetaxel, an investigational, orally administered taxane, in patients with metastatic breast cancer (MBC). CONTESSA is comparing tesetaxel dosed orally at 27 mg/m2 on Day 1 of a 21-day cycle plus a reduced dose of capecitabine (1,650 mg/m2/day dosed orally for 14 days of a 21-day cycle) to the approved dose of capecitabine alone (2,500 mg/m2/day dosed orally for 14 days of a 21-day cycle) in 685 patients randomized 1:1 with hormone receptor (HR)-positive, human epidermal growth factor receptor 2 (HER2)‑negative MBC previously treated with a taxane in the neoadjuvant or adjuvant setting. Capecitabine is an oral chemotherapy agent that is considered a standard-of-care treatment in MBC. Where indicated, patients must have been treated with endocrine therapy with or without a cyclin-dependent kinase (CDK) 4/6 inhibitor. The primary endpoint is progression-free survival (PFS) as assessed by an Independent Radiologic Review Committee (IRC). The secondary endpoints are overall survival (OS), objective response rate (ORR) as assessed by the IRC and disease control rate (DCR) as assessed by the IRC.

Positive results of CONTESSA were presented at the 2020 San Antonio Breast Cancer Symposium in December. The primary endpoint was met: median PFS was 9.8 months for tesetaxel plus a reduced dose of capecitabine versus 6.9 months for the approved dose of capecitabine alone, an improvement of 2.9 months. The risk of disease progression or death was reduced by 28.4% (hazard ratio=0.716 [95% confidence interval [CI]: 0.573‑0.895; p=0.003]). Neutropenia was the most common Grade ≥3 treatment‑emergent adverse event.

BioInvent successfully carries out a directed share issue of approximately SEK 962 million (approximately USD 116 million)

On February 23, 2021 The Board of Directors of BioInvent International AB ("BioInvent" or the "Company") (OMXS: BINV) reported that it has resolved to issue 19,095,000 shares (the "New Shares") in a directed share issue to international and Swedish institutional investors, where 2,834,399 New Shares are issued based on the authorization granted by the Extraordinary General Meeting on 27 November 2020, and 16,260,601 New Shares are issued subject to the approval of an upcoming Extraordinary General Meeting to be held on 23 March 2021 (together the "Directed Share Issue") (Press release, BioInvent, FEB 23, 2021, View Source;approxim,c3293708 [SID1234575413]).

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The price for the New Shares is SEK 50.36 per share and corresponds to the 5-day volume weighted share price of BioInvent’s share, as traded on Nasdaq Stockholm.
Investors in the Directed Share Issue are a range of international and Swedish institutional investors.
Through the Directed Share Issue, BioInvent will receive proceeds amounting to approximately SEK 962 million (approximately USD 116 million) before transaction costs.
BioInvent changes the date for publication of the year-end report 2020 and the interim report for the fourth quarter of 2020 to Tuesday, February 23, 2021. The previously announced date for publication was February 25, 2021.
Comments from the CEO

"We are very pleased to carry out this successful share issue, proceeds from which will fund the continued transformation of BioInvent and expansion of our clinical programs. BioInvent has a strong clinical oncology pipeline thanks to our F.I.R.S.T technology platform, with four ongoing clinical trials of first-in-class antibodies with unique mechanisms of action. This capital injection enables us to accelerate and broaden our clinical development." said Martin Welschof, CEO of BioInvent.

"Assuming continued generation of positive data, we plan to in particular use the funds to prepare a pivotal clinical trial of our first-in-class anti-FcγRIIB antibody BI-1206 for the treatment of Non-Hodgkin’s Lymphoma, with the aim of receiving an accelerated regulatory pathway. We also expect to expand the clinical programs of BI-1206 in combination with Keytruda and the anti-TNFR2 antibody BI-1808 as monotherapy and in combination with Keytruda.

Investors in the Directed Share Issue are a range of international and Swedish institutional investors, including Redmile Group, LLC., Invus, HBM Healthcare Investments, The Fourth National Swedish Pension Fund, Swedbank Robur Fonder and Van Herk Investments. Upon completion, Redmile will become the largest shareholder in BioInvent representing approximately 16.8 per cent of the shares and votes in the company.

I would like to thank our existing investors for their continued support and am delighted to welcome new investors in BioInvent. I look forward to continuing to work with all our investors as we continue to advance our innovative treatments to improve patients’ lives."

The Directed Share Issue

The price for the New Shares is SEK 50.36 per share and corresponds to the 5-day volume weighted share price of BioInvent share, as traded on Nasdaq Stockholm. The price per share in the Directed Share Issue has been resolved by the Board of Directors in consultation with the Joint Global Coordinators, based on negotiations with the largest new investor. Through the Directed Share Issue, BioInvent will receive proceeds amounting to approximately SEK 962 million before transaction costs.

The Directed Share Issue consists of two separate tranches: the first tranche amounting to 2,834,399 New Shares based on the authorization granted by the Extraordinary General Meeting held on 27 November 2020 ("Tranche 1") and the second tranche of 16,260,601 New Shares which will be subject to the approval of the Extraordinary General Meeting to be held on 23 March 2021 ("Tranche 2"). Completion of Tranche 1 is not conditional upon completion of Tranche 2.

The first day of trading for the New Shares in Tranche 1 will be on or about 26 February 2021 Subject to the approval of the Extraordinary General Meeting, the first day of trading for the New Shares in Tranche 2 is expected to be on or about 30 March 2021.

Tranche 2 of the Directed Share Issue will be subject to a listing prospectus prior to shares being admitted to trading on Nasdaq Stockholm. The listing prospectus is expected to be approved by the Swedish Financial Supervisory Authority on or about 24 March 2021, i.e. before the shares in Tranche 2 are subject to trading.

The reasons for deviating from the shareholders’ preferential rights are to diversify the shareholder base in the Company amongst international and Swedish institutional investors and at the same time take advantage of the opportunity to raise capital in a time and cost-efficient manner. The Board of Directors’ assessment is that the price per share in the Directed Share Issue is in accordance with market conditions.

The Directed Share Issue will entail a dilution of approximately 32.7 per cent of the number of outstanding shares and votes in the Company after the Directed Share Issue. Through the Directed Share Issue, the number of outstanding shares and votes in the Company will increase from 39,376,096 to 42,210,495 through Tranche 1 and from 42,210,495 to 58,471,096 through Tranche 2. The share capital will increase from SEK 7,875,219.20 to SEK 8,442,099 through Tranche 1 and from SEK 8,442,099 to SEK 11,694,219.20 through Tranche 2.

The Directed Share Issue is subject to certain customary conditions of the placing agreement entered into by the Company with the Joint Global Coordinators in connection with the Directed Share Issue, mainly entailing that the placing agreement is not terminated prior to the delivery of the respective Tranches.

Background and reasons

The net proceeds from the Directed Issue are mainly intended for: (i) preparations towards a pivotal clinical trial with the aim of receiving an accelerated regulatory pathway for BI-1206 for the treatment of Non-Hodgkin’s Lymphoma assuming continued generation of positive data; (ii) progressing the clinical development of BI-1206 in its Phase I/II trial for the treatment of advanced solid tumors in combination with Keytruda (pembrolizumab). Assuming positive clinical data, the net proceeds may be used to broaden the clinical studies; (iii) progressing the clinical development of BI-1808, as monotherapy and in combination with Keytruda (pembrolizumab), for the treatment of solid tumors and cutaneous T-cell lymphoma (CTCL). Assuming positive clinical data, the net proceeds may be used to broaden the clinical studies; (iv) developing BT-001, in partnership with Transgene, for the treatment of solid cancers. Assuming positive clinical data, the net proceeds may be used to broaden clinical studies; (v) advancing BI-1607 into clinical development for the treatment of solid cancers; and (vi) continued development of the Company’s prioritized preclinical projects with the aim to generate additional clinical programs.

Moreover, a strengthened financial position enables increased strategic flexibility and improved ability to negotiate with potential partners.

Lock-up undertakings and voting commitments

In connection with the Directed Share Issue, the Company has undertaken, subject to customary exceptions and the completion of the Directed Share Issue, to not issue additional shares for a period of 180 days as from launch of the Directed Share Issue. In addition, shareholding members of the Board of Directors and management of BioInvent have undertaken to not sell shares in the Company for a period of 90 days as from launch of the Directed Share Issue, subject to customary exceptions.

Shareholders together currently representing approximately 43 per cent of the shares and votes in the Company, have undertaken, or indicated an intention, to vote in favor of the EGM approval of Tranche 2.

Advisors

Van Lanschot Kempen Wealth Management N.V. (Kempen & Co) and Pareto Securities AB have been appointed as Joint Global Coordinators in connection with the Directed Share Issue. Mannheimer Swartling Advokatbyrå acts as legal counsel to the Company and Baker McKenzie acts as legal counsel to the Joint Global Coordinators.