On October 7, 2021 The Board of Directors of Alligator Bioscience AB (publ) ("Alligator" or "the Company") reported that , subject to approval by the Extraordinary General Meeting on 8 November 2021, resolved to carry out a rights issue of shares with preferential rights for the Company’s existing shareholders of approximately SEK 257 million (the "Rights Issue") (Press release, Alligator Bioscience, OCT 7, 2021, View Source [SID1234590892]). The Company has received subscription commitments from a selection of the Company’s larger existing shareholders, including the AP4, Roxette Photo NV and Omentum S.A., amounting to approximately SEK 43 million, corresponding to approximately 17 percent of the Rights Issue. Furthermore, the Company has entered into agreements on guarantee commitments of approximately SEK 214 million, which secures the Rights Issue up to 100 percent. In addition, Öhman Fonder and all members of the Company’s board and management with shareholdings in the Company have expressed their intention to subscribe for their respective pro rata share in the Rights Issue. Alligator will use the proceeds from the Rights Issue to conduct phase II studies for mitazalimab, preparations for and initiation of phase II studies for ATOR-1017 and further development of other pipeline candidates. The Rights Issue is subject to approval by the Extraordinary General Meeting on 8 November 2021, and the notice of the Extraordinary General Meeting will be announced in a separate press release.
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One (1) existing share in the Company entitles to three (3) subscription rights. Two (2) subscription rights entitle to subscription of one (1) new share, i.e., a subscription ratio of 3:2.
The subscription price is SEK 2 per new share, which, assuming the Rights Issue is fully subscribed, results in the Company receiving issue proceeds of approximately SEK 257 million before deduction of transaction costs.
The record date for the Rights Issue is 10 November 2021 and the subscription period runs from and including 12 November 2021 up to and including 26 November 2021.
The last day of trading in the Alligator share including the right to participate in the Rights Issue is 8 November 2021.
The board’s resolution on the Rights Issue is subject to approval by the Extraordinary General Meeting on 8 November 2021. Major shareholders, who together represent approximately 17 percent of the shares and votes in the Company, have undertaken to vote for the Rights Issue at the Extraordinary General Meeting.
Major shareholders have expressed their support for the Rights Issue through subscription commitments amounting to approximately SEK 43 million, corresponding to approximately 17 percent of the Rights Issue. Furthermore, the Company has entered into agreements on guarantee commitments of approximately SEK 214 million, corresponding to approximately 83 percent of the Rights Issue, which secures the Rights Issue up to 100 percent. The guarantee commitments consist partly of a so-called top guarantee and partly of a bottom guarantee. In addition, Öhman Fonder and all members of the Company’s board and management have expressed their intention to subscribe for their respective pro rata share in the Rights Issue.
The Company intends to publish a prospectus regarding the Rights Issue on 9 November 2021.
Background and reason for the Rights Issue
Alligator is active in the phases of drug development that range from idea and early research to clinical phase II studies in patients. This includes, among other things, the development and optimization of new drug candidates, evaluation of preclinical efficacy and safety, and finally confirmatory clinical studies on cancer patients.
Alligator has shown strong Proof of Mechanism data in Phase I studies for mitazalimab, Alligator’s most advanced immuno-oncology candidate. In 2021, the Company’s focus has been on preparations for the inclusion of the first patient in the clinical phase II study OPTIMIZE-1. The first patient was successfully included in September 2021 and interim efficacy data are estimated for the end of the fourth quarter of 2022. In order to balance the risk in the Company’s development portfolio and to increase the likelihood of clinical success, Alligator is planning a second phase II study with mitazalimab, OPTIMIZE-2. In the study, mitazalimab is planned to be combined with current standard of care in renal cell carcinoma, bladder cancer or hepatocellular carcinoma. OPTIMIZE-2 is expected to start in the second half of 2022.
In June 2021, new promising data from the Phase I study with ATOR-1017 were presented, confirming the therapeutic potential and demonstrating clear signals of proof of mechanism in combination with a favorable safety profile. Previous interim data, presented in the fall of 2020, from the ongoing Phase I study in patients with advanced cancer showed a promising safety profile for ATOR-1017, with only a few drug-related side effects all being mild or moderate (grade 1 or 2). Preparations are ongoing to start clinical Phase II studies, which is expected to take place during the third quarter of 2022.
To ensure continued successful development in accordance with the Company’s business plan and strategy, Alligator has resolved to carry out the Rights Issue. The Rights Issue is estimated to provide Alligator with approximately SEK 257 million before transaction costs. The board assesses that the working capital requirement for the coming twelve-month period is met by available cash and the net proceeds from the Rights Issue.
The expected net proceeds from the Rights Issue will, in the following order of priority and with an approximate proportion indicated in parentheses, be used for:
Conduction of phase II studies with mitazalimab (65 percent)
Preparations for and initiation of phase II study for ATOR-1017 (15 percent)
Development of other pipeline candidates (20 percent)
Terms of the Rights Issue
Those who are registered as shareholders on the record date, 10 November 2021, have the preferential right to subscribe for new shares in the Rights Issue in relation to the number of shares held on the record date. One (1) existing share in the Company entitles to three (3) subscription rights. Two (2) subscription rights entitle to subscription of one (1) new share, i.e., a subscription ratio of 3:2. In addition, investors are offered the possibility to subscribe for shares without subscription rights.
If not all newly issued shares are subscribed for by exercise of subscription rights, allotment of the remaining shares shall be made within the highest amount of the Rights Issue: firstly, to those who have subscribed for shares by exercise of subscription rights (regardless of whether they were shareholders on the record date or not) and who have applied for subscription of shares without exercise of subscription rights and if allotment to these cannot be made in full, allotment shall be made pro rata in relation to the number of subscription rights that each and every one of those, who have applied for subscription of shares without exercise of subscription rights, have exercised for subscription of shares; secondly, to those who have applied for subscription of shares without exercise of subscription rights and if allotment to these cannot be made in full, allotment shall be made pro rata in relation to the number of shares the subscriber in total has applied for subscription of shares; and thirdly, to those who have provided underwriting commitments with regard to subscription of shares, in proportion to such underwriting commitments. To the extent that allotment in any section above cannot be done pro rata, allotment shall be determined by drawing of lots.
The subscription price is SEK 2 per new share. Provided that the Rights Issue is fully subscribed, the share capital will increase by a maximum of SEK 51,399,802.80 by a new issue of a maximum of 128,499,507 new shares. In the event of full subscription, the Rights Issue will provide Alligator with approximately SEK 257 million before deduction of issue costs. Shareholders who choose not to participate in the Rights Issue will, provided that the Rights Issue is fully subscribed, have their ownership diluted by approximately 60 percent, but are able to financially compensate for this dilution by selling their subscription rights.
Subscription of shares shall take place during the period from and including 12 November 2021 to and including 26 November 2021. The board has the right to extend the subscription and payment period. A possible extension of the subscription period shall be announced by press release no later than the last subscription day in the Rights Issue, i.e. 26 November 2021. Trading in subscription rights takes place on Nasdaq Stockholm during the period from and including 12 November 2021 to and including 23 November 2021 and trading in paid subscribed shares (Sw. Betalda tecknade aktier) during the period from and including 12 November 2021 until the Rights Issue has been registered with the Swedish Companies Registration Office (Sw. Bolagsverket).
Subscription commitments, guarantee commitments and declarations of intent
Alligator has received subscription commitments from a selection of the Company’s larger existing shareholders, including the AP4, Roxette Photo NV and Omentum S.A., amounting to approximately SEK 43 million, corresponding to approximately 17 percent of the Rights Issue. Furthermore, the Company has entered into agreements on guarantee commitments in the form of a so-called bottom guarantee of approximately SEK 188 million, corresponding to approximately 73 percent of the Rights Issue, and a so-called top guarantee of approximately SEK 26 million, corresponding to approximately 10 percent of the Rights Issue. In addition, Öhman Fonder and all members of the Company’s board and management with shareholdings in the Company, including Søren Bregenholt (CEO), Anders Ekblom (Chairman of the board), Marie Svensson (CFO), Peter Ellmark (CSO), Veronica Wallin (board member) and Hans-Peter Ostler (board member), have expressed their intentions to subscribe for their respective pro rata share in the Rights Issue. The bottom guarantee ensures, provided that subscription corresponds to at least the subscription commitments, that approximately 90 percent of the Rights Issue is subscribed and paid for. Through the top guarantee, provided that subscription corresponds to at least the subscription commitments and the bottom guarantee, that 100 percent of the Rights Issue is subscribed and paid for.
For the guarantee commitments, compensation is paid either in cash or in the form of newly issued shares in the Company. The subscription price for any shares issued to guarantors shall correspond to 90 percent of the volume-weighted average share price (VWAP) for the Company’s share on Nasdaq Stockholm during the subscription period in the Rights Issue (i.e. during the period 12 – 26 November 2021), however no lower than the subscription price in the Rights Issue. In order to enable new issues of shares as guarantee compensation to the guarantors who choose to receive guarantee compensation in newly issued shares, the board has proposed that the Extraordinary General Meeting on 8 November 2021, which is proposed to resolve on the approval of the Rights Issue, also resolves on authorization for the board to resolve on new issues of such shares to guarantors.[1]
Preliminary timeline for the Rights Issue
8 November 2021
Extraordinary General Meeting
8 November 2021
Last day of trading incl. preferential rights
9 November 2021
First day of trading excl. preferential rights
9 November 2021
Estimated publication of prospectus
10 November 2021
Record date
12 November – 23 November 2021
Trading in subscription rights
12 November – 26 November 2021
Subscription period
12 November 2021 – Until the Rights Issue is registered at the Swedish Companies Registration Office
Trading in paid subscription shares (Sw. "BTA")
1 December 2021
Estimated publication of outcome in the Rights Issue
Lock-up agreements
In connection with the Rights Issue, the Company has undertaken towards the Joint Global Coordinators, subject to customary exceptions, not to issue additional shares or other share-related instruments for a period of 180 days after the end of the subscription period in the event of an issue with preferential rights for existing shareholders, and 90 days after the end of the subscription period in the event of an issue without preferential rights for existing shareholders. In addition, the Company’s board members and senior executives who own shares in Alligator, subject to customary exceptions, have undertaken, towards the Joint Global Coordinators, not to transfer or otherwise sell their shares for a period of 180 days after the end of the subscription period.
Extraordinary General Meeting
The board’s resolution on the Rights Issue is subject to approval by the Extraordinary General Meeting on 8 November 2021. Notice of the Extraordinary General Meeting will be announced in a separate press release.
Prospectus
Full terms and conditions for the Rights Issue, as well as other information about the Company and information about subscription commitments, guarantee commitments and lock-up commitments will be presented in the prospectus that the Company is expected to publish around 9 November 2021 (the "Prospectus").
Advisers
DNB Markets, a part of DNB Bank ASA, Sweden Branch and Redeye AB act as Joint Global Coordinators in connection with the Rights Issue. Setterwalls Advokatbyrå AB acts as legal adviser to Alligator and Baker & McKenzie Advokatbyrå KB acts as legal adviser to the Joint Global Coordinators in connection with the Rights Issue. Aktieinvest FK AB acts as the issuing agent in the Rights Issue.