TIDMSAR
RNS Number : 1392I
Sareum Holdings PLC
03 August 2023
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
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OR THE REPUBLIC OF SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN
WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE
UNLAWFUL.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT
FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018 ("MAR"), AND IS DISCLOSED IN ACCORDANCE WITH
THE COMPANY'S OBLIGATIONS UNDER ARTICLE 17 OF MAR.
Sareum Holdings PLC
("Sareum" or the "Company")
Equity Prepayment Facility of up to GBP5 million
Cambridge, UK , 3rd August 2023 - Sareum Holdings plc (AIM:
SAR), a clinical-stage biotechnology company developing next
generation kinase inhibitors for autoimmune diseases and cancer, is
pleased to announce that it has agreed terms on an Equity
Prepayment Facility of up to GBP5 million (the "Facility") with
RiverFort Global Opportunities PCC Ltd (the "Investors" or
"RiverFort") as arranged by RiverFort Global Capital Ltd, with an
initial deposit of GBP2 million (the "First Deposit"), expected to
be received by the Company on 4(th) August 2023 (the "Execution
Date"), net of associated costs.
The Company intends to use the Facility, if fully drawn,
together with the receipt of anticipated tax credits to the amount
of GBP1.6 million, to complete the Phase 1a/b clinical development
of the Company's lead candidate SDC-1801, which is expected to be a
primary catalyst for driving shareholder value, and for general
working capital to Q4 2024.
SDC-1801 is a dual TYK2/JAK1 kinase inhibitor being developed as
a potential new therapeutic for a range of autoimmune diseases with
an initial focus on psoriasis, an autoimmune condition affecting
the skin.
Dr Tim Mitchell, CEO of Sareum, commented:
"Our lead candidate SDC-1801 is progressing well in its
development. This agreement with RiverFort provides important
support for the trial and general working capital.
"This funding, if fully drawn, alongside anticipated tax
credits, allows us to complete plans for the Phase 1b portion of
the trial once the Phase 1a part is concluded, and provides cash
runway into Q4 2024.
"We're delighted to have this commitment, which will be critical
for us in advancing this promising candidate through clinical
development and supporting our broader portfolio of TYK2/JAK1
kinase inhibitors.
"The Company expects to provide a further update on the trial of
SDC-1801 once initial safety and pharmacokinetic data observed in
the single ascendinIg dose part of the study provide sufficient
support for progression to Part 2 of the study, the multiple
ascending dose, expected in H2 2023."
The key terms of the Facility :
-- RiverFort has committed to providing an Equity Prepayment Facility of up to GBP5 million.
-- The First Deposit of GBP2 million.
-- Two further committed deposits of GBP0.3 million each on the
3-month and 6-month anniversaries of the First Deposit (the
"Further Deposits")
-- A fourth deposit, on the 6-month anniversary of the date of
the First Deposit, of up to GBP1.4 million (the "Fourth Deposit")
subject to the Customary Conditions (defined below) and the
following trading conditions:
a) the maximum amount deposited and outstanding being not
greater than 10% of the market capitalisation of the Company at the
time of the deposit.
b) the maximum amount drawn and outstanding being not greater
than a 15x multiple to the 10-day and 20-day Average Daily Traded
Value of the Company's ordinary shares.
c) maximum amount deposited and outstanding being not greater
than GBP1 million prior to the deposit.
-- Future deposits, to the balance of up to GBP1 million (the
"Future Deposits"), may be mutually agreed between the Company and
RiverFort.
-- All deposits will be subject to customary conditions
precedent (including sufficient authority to allot shares and grant
warrants to the Investors and disapply pre-emption rights, and no
material adverse change to the Company or its group since the
Execution Date) (the "Customary Conditions").
-- In respect of the First Deposit, RiverFort will be issued
1,953,543 ordinary shares of 1.25p each ("Ordinary Shares"), based
on a reference price of 102.3781 pence (the "Initial Reference
Price") (the "Initial Placing Shares").
-- In respect of any subsequent deposits, RiverFort will be
issued, at the time of each relevant deposit, such number of new
Ordinary Shares as determined by the quantum of the deposit divided
by the average of the 5 daily VWAPs preceding the date of the
relevant deposit being made (the "Reference Price") (the "Placing
Shares"). The Initial Placing Shares and any subsequent Placing
Shares will be issued at nominal value.
-- The term of the Facility (other than the Future Deposits) is
two years from the Execution Date (the "Maturity Date"), the term
of any Future Deposits may be mutually agreed between the Company
and RiverFort, provided that it is not more than two years from the
date thereof.
-- The Facility automatically terminates once the Facility is redeemed in full.
-- During the Term of the Facility, RiverFort may from time to
time, to settle the amounts drawn and outstanding with respect to
the deposits, interest, default interest and/or any fees specified,
elect to dispose of the Initial Placing Shares and any subsequently
issued Placing Shares. The amount outstanding under the Facility
deemed to be redeemed by such disposals will be equivalent to the
number of ordinary shares disposed of multiplied by the lower of:
(a) the lower of 130% of the Reference Price applicable to the
relevant deposit, and the price at which the Company has issued any
Shares in an equity fundraising whilst any balance is outstanding
(if the placing price for such equity fundraising is below the
Reference Price) (the "Fixed Premium Placing Price"); or (b) 10%
discount to the average of the lowest 4 daily VWAPs in the 15
trading days preceding each relevant subscription notice (the
"Adjusted Placing Price") (together, the "Placing Subscription
Price").
-- If the Investors have disposed of all the Initial Placing
Shares or subsequent Placing Shares during the term of the Facility
and amounts remain outstanding, the Investors can issue
subscription notices to the Company to receive further subscription
shares (the "Subscription Shares"). The subscription price payable
by the Investors will be applied to reduce the principal amount of
Deposits (and any associated interest) outstanding pursuant to the
Facility. The number of Subscription Shares to be issued would be
calculated at the lower of the Fixed Premium Placing Price and the
Adjusted Placing Price.
-- If disposals and/or subscriptions at the Placing Subscription
Prices have not been completed so as to fully settle the principal
amount of Deposits (and any associated interest) outstanding during
the term, the amounts drawn and outstanding shall be redeemed on
the Maturity Date. In the event the principal amount of Deposits
outstanding (and any associated interest) has been fully repaid at
the Maturity Date and the Investors still hold any Placing or
Subscription Shares, such shares will be disposed of in
consultation with the Company and 95% of the net sale proceeds will
be remitted to the Company.
-- No interest is payable on the First Deposit, the Further
Deposits and the Fourth Deposit. Interest on any Future Deposit
shall be mutually agreed between the Company and RiverFort.
-- A 4.5% placing fee will be deducted from any deposit that is made to the Company.
-- A GBP50,000 implementation fee will be payable by the
Company, which is to be satisfied by the issue of new Ordinary
Shares at the Initial Reference Price as an implementation fee for
the Facility.
-- The Investors will also be granted a number of warrants equal
to 45% of each deposit divided by the relevant Reference Price. The
exercise price of the warrants payable to the Company will be a 40%
premium to the relevant Reference Price (the "Warrant Price") and
with a 48-month term ("Warrant Term"). Accordingly, RiverFort will
be granted 879,094 warrants at the time of the First Deposit,
exercisable at 143.33 pence each.
-- Should the Company undertake a share placing during each
relevant Warrant Term, the Warrant Price will be reset to the
placing price if the resultant Warrant Price would be lower.
Background to and reasons for the Equity Prepayment Facility
Sareum is a clinical stage, small molecule drug development
company developing next generation kinase inhibitors for autoimmune
diseases and cancer. The Company's pipeline is focused on the JAK
kinase cell signalling family, which is important for maintaining a
healthy immune system. This is an area of growing commercial focus
with good scientific validation.
The Company's lead candidate, SDC-1801, simultaneously inhibits
the TYK2 and JAK1 signalling pathways. SDC-1801 is a potential
treatment for a range of autoimmune diseases and is currently in
Phase 1a/b clinical development with an initial focus on psoriasis,
a disease affecting more than 125 million people worldwide ([1])
and with a potential market value of $48 billion.
A Phase 1a clinical study is underway in Australia investigating
the safety and pharmacokinetics of an oral formulation of SDC-1801
in ascending doses administered to healthy subjects.
Full safety data from this trial are expected to be available
during the first half of 2024 and, provided satisfactory results
are obtained and funding is available under the Facility or
otherwise, a Phase 1b clinical study is expected to commence as
soon as possible thereafter in psoriasis patients.
The Directors have assessed a number of financing options for
the Company including an equity raise and believe that the Facility
is the best option available to the Company at the present time in
order to further fund its p rogress.
The First Deposit, Further Deposits and anticipated tax credits
during the remainder of 2023 are expected to be sufficient to
enable the Company to complete the Phase 1a part of the SDC-1801
clinical study, and to provide funding through to Q1 2024.
In the event that the Company is unable to draw down the
majority of the additional GBP2.4 million potentially available
under the Facility as and when expected, the Company will require
alternative funding to complete the Phase 1b clinical developments
activities being progressed and to provide working capital.
General Meeting
The Initial Placing Shares and the Placing Shares to be issued
in connection with the committed deposit of GBP0.3 million on the
3-month anniversary of the First Deposit, and the relevant Warrants
to be granted, to RiverFort pursuant to the Facility will be
allotted pursuant to the Company's existing general authority to
issue shares on a non pre-emptive basis, as granted by the
Company's shareholders at the Company's Annual General Meeting on
16 December 2022. The Company will seek approval from shareholders
to renew this general authority at its next annual general meeting
in order to allot additional Placing Shares in connection with
subsequent deposits, and to grant the relevant Warrants, to
RiverFort in respect of future prepayments where draw down is
effected following such next annual general meeting.
If the resolutions are not passed, the Company will not be able
to draw down any further amounts under the Facility. This would
materially and adversely affect the Company's business plans and
severely impact its ability to meet its intended timeline for the
development of SDC-1801 and SDC-1802.
Application for admission to trading
Application will be made to the London Stock Exchange plc for
the admission of 2,002,382 new Ordinary Shares, being the Initial
Placing Shares and the new Ordinary Shares issued to RiverFort as
an implementation fee, to trading on AIM ("Admission").
It is expected that Admission of the Initial Placing Shares and
the new Ordinary Shares issued to RiverFort as an implementation
fee will occur at 8.00 a.m. (London time) on Tuesday 8th August
2023.
Immediately following Admission, the Company will have
70,071,797 ordinary shares of 1.25 pence each in issue; therefore
the total voting rights in the Company will be 70,071,797. This
figure may be used by shareholders in the Company as the
denominator for the calculations by which they may determine if
they are required to notify their interest in, or a change to their
interest in, the share capital of the Company under the FCA 's
Disclosure Guidance and Transparency Rules.
Sareum's investor presentation can be found at the following
link:
https://sareum.com/wp-content/uploads/2023/08/Sareum-Company-July-2023.pdf
-Ends-
For further information, please contact:
Sareum Holdings plc
Tim Mitchell, CEO 01223 497700
Lauren Williams, Head of Investor Relations ir@sareum.co.uk
Strand Hanson Limited (Nominated Adviser)
James Dance / James Bellman 020 7409 3494
Peel Hunt LLP (Joint Corporate Broker)
James Steel / Patrick Birkholm 020 7418 8900
Hybridan LLP (Joint Corporate Broker)
Claire Noyce 020 3764 2341
Consilium Strategic Communications (Financial
PR)
Jessica Hodgson / Davide Salvi / Stella
Lempidaki 020 3709 5700
About Sareum
Sareum Holdings (AIM:SAR) is a clinical-stage biotechnology
company developing next generation kinase inhibitors for autoimmune
disease and cancer.
The Company is focused on developing next generation small
molecules which modify the activity of the JAK kinase family and
have best-in-class potential. Its lead candidate, SDC-1801,
simultaneously inhibits TYK2 and JAK1. SDC-1801 is a potential
treatment for a range of autoimmune diseases and has entered Phase
1a/b clinical development with an initial focus on psoriasis.
Sareum has an economic interest in SRA737, a clinical-stage Chk1
inhibitor which it originally developed in collaboration with
several Cancer Research UK-related organisations. SRA737 has shown
promising safety and efficacy in two Phase 1/2 clinical trials.
Sareum is also developing SDC-1802, a TYK2/JAK1 inhibitor with a
potential application for cancer immunotherapy.
Sareum Holdings plc is based in Cambridge, UK, and is listed on
the AIM market of the London Stock Exchange, trading under the
ticker SAR. For further information, please visit the Company's
website at www.sareum.com
[1] https://www.psoriasis.org/psoriasis-statistics/
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