On August 10, 2020 Saniona (OMX: SANION) ("Saniona" or the "Company"), a clinical-stage biopharmaceutical company focused on rare diseases, reported that its Board of Directors has resolved on a directed issue of 30,660,374 shares to a number of U.S. and international institutional investors and sector specialists based on the authorization granted by the Annual General Meeting held on 6 May 2020 (the "Directed Issue") (Press release, Saniona, AUG 10, 2020, View Source [SID1234563249]).
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The new shares were issued at a subscription price of USD 2.12 per share (SEK18.50), and represents a discount of approximately 45 per cent compared to the volume weighted average price (VWAP) on Nasdaq Stockholm for the period of the last 45 days up to and including 7 August 2020.
Through the Directed Issue, the Company will receive gross proceeds of USD 65 million (approximately SEK 567 million).
The Directed Issue was led by RA Capital Management with participation from Pontifax Venture Capital and New Leaf Venture Partners among other U.S. and international healthcare investors as well as the Second Swedish National Pension Fund (AP2), the Third Swedish National Pension Fund (AP3) and the Fourth Swedish National Pension Fund (AP4).
The net proceeds will be used to continue Saniona’s advancement of its late-stage clinical trials with Tesomet in two rare eating disorders, hypothalamic obesity (HO) and Prader Willi Syndrome (PWS), as well as to build its U.S.-based organization in support of these programs.
Comment from Rami Levin, President & CEO of Saniona
"The participation of multiple well-respected U.S. and International institutional healthcare investors in this financing led by RA Capital Management demonstrates the significant potential of Saniona’s rare disease pipeline. With this financing, we will be able to further increase shareholder value by advancing Tesomet to registration for approval, moving our early-stage pipeline into the clinic, and building our U.S. organization. We believe achieving these milestones will position us as potentially the first treatment for two rare diseases, hypothalamic obesity and Prader-Willi Syndrome" said Rami Levin, President and CEO of Saniona.
The Directed Issue
The Board of Directors of Saniona has, in accordance with the issue authorization granted by the Annual General Meeting on May 6, 2020, resolved on a directed issue of 30,660,374 shares at a subscription price of USD 2.12 per share (SEK 18.50), consequently raising gross proceeds of USD 65 million (approximately SEK 567 million) before deduction of costs related to the transaction.
The net proceeds will be used to continue Saniona’s advancement of its late-stage clinical trials with Tesomet in two rare eating disorders, hypothalamic obesity (HO) and Prader Willi Syndrome (PWS), as well as to build its U.S.-based organization in support of these programs.
The Directed Issue was led by RA Capital Management with participation from Pontifax Venture Capital and New Leaf Venture Partners among other U.S. and international healthcare investors as well the Second Swedish National Pension Fund (AP2), the Third Swedish National Pension Fund (AP3) and the Fourth Swedish National Pension Fund (AP4). The subscription price per share of USD 2.12 (SEK 18.50) has been established through arms’ length negotiations with a number of institutional investors over a period of time. The Company’s Board of Directors is therefore of the opinion that the subscription price has been set at market terms and accurately reflects current market conditions and demand. The reasons for the deviation from the shareholders’ preferential right were mainly to diversify the shareholder base with financially strong and well reputable U.S. and Swedish institutional investors and sector specialists and to enable a capital raise in a time and cost-efficient manner. It is the assessment of the Board of Directors that the Directed Issue is beneficial to the Company and hence for all existing shareholders.
Through the Directed Issue, the number of shares in the Company will increase by 30,660,374 to 61,043,690, and the share capital will increase by SEK 1,533,018.70 to SEK 3,052,184.50. The Directed Issue entails a dilution of approximately 50 per cent for existing shareholders, based on the number of shares in the Company after the Directed Issue.
In connection with the Directed Issue, the Company has agreed pursuant to a lock-up undertaking, subject to customary exceptions, not to issue additional shares or other securities for a period of 90 days following settlement of the Directed Issue. In addition, in connection with the Directed Issue, members of the Board of Directors and management of Saniona have agreed not to sell any shares or other securities in the Company for a period of 90 days following the settlement of the Directed Issue, subject to customary exceptions and furthermore subject to that warrants of series TO2 (where the exercise period runs between 7 September 2020 – 21 September 2020) or shares subscribed through exercise of such warrants are not covered by the lock-up undertaking.
A prospectus relating to the listing of the shares in the Directed Issue on Nasdaq Stockholm is expected to be approved and registered by the Swedish Financial Supervisory Authority ("SFSA") on or about 13 August, 2020, i.e. before the new shares are subject to trading on Nasdaq Stockholm.
The completion of the Directed Issue is subject to certain customary conditions of the investment agreement entered into by the Company with the investors in connection with the Directed Issue, whereby the investors may for customary reasons terminate the placing in full if it occurs before settlement of the placing.
Financial and legal advisors
Oppenheimer & Co. Inc. and ABG Sundal Collier AB acted as Joint Bookrunners ("Joint Bookrunners") while Setterwalls Advokatbyrå AB acted as legal advisor to Saniona in relation to Swedish law and Goodwin Procter LLP acted as legal advisor to Saniona in relation to US law.