AlzeCure Pharma AB ("AlzeCure" or "the Company"), a pharmaceutical company that develops a broad portfolio of small molecule drug candidates for diseases affecting the central nervous system, with projects in both Alzheimer’s disease and pain, today announced that the Company's Board of Directors has resolved on a new issue of shares of approximately SEK 60.4 million, with preferential rights for existing shareholders (the “Rights Issue”). The Rights Issue is subject to approval at an Extraordinary General Meeting on March 1, 2022. Record date for participation in the Rights Issue is March 4, 2022. The purpose of the Rights Issue is to finance planned stages with AlzeCure's candidate drugs in clinical or late preclinical development. According to the terms of the Rights Issue, five (5) existing shares in AlzeCure entitle subscribe for two (2) new shares at a price of SEK 4.00 per share. The Rights Issue is secured to approximately 80 percent through subscription and guarantee commitments. Subscription and guarantee commitments from management and board members amount to a total of SEK 2.5 million. To enable additional capital injection, the Board may exercise an over-allotment option of up to SEK 12.0 million (the “Over-allotment Option”). If the Over-allotment Option is exercised in its entirety, the maximum capital injection amounts to approximately SEK 72.4 million. The exercise of the Over-allotment Option is contingent on resolution by the Board of Directors to issue new shares with the support of the existing authorization to issue new shares. Notice of the Extraordinary General Meeting is published via a separate press release.
Background and motives for the Rights Issue
AlzeCure develops potentially groundbreaking first-in-class treatments for severe diseases affecting the central nervous system, such as Alzheimer's and pain. The Company's development is based on three different research platforms, NeuroRestore®, Alzstatin® and Painless, from which AlzeCure develops its drug candidates, which provides a broad portfolio of symptom-relieving, disease-modifying and preventive potential new drugs.
NeuroRestore® is a platform consisting of symptom-relieving drug candidates for disorders in which the cognitive ability is impaired, such as in Alzheimer's disease. The Company currently conducts the second part of a phase Ia study with its candidate drug ACD856 and plans thereafter to initiate a phase Ib study with the purpose of obtaining effect data on cognitive function in humans at an early stage. The Company intends to allocate 12 percent of the amount raised in the Rights Issue to NeuroRestore® and the further development of its candidates.
The Alzstatin® platform focuses on developing preventive and disease-modifying candidates for early treatment for Alzheimer's disease. AlzeCure intends to continue the development of the candidates within the Alzstatin platform towards preclinical safety tests in reference to ACD680, with the aim to identify the optimal candidate that can be advanced further towards the clinical development phase. The Company intends to allocate 20 percent of the amount raised in the Rights Issue to Alzstatin® and the further development of its candidates.
Painless is the Company's research platform within pain and contains ACD440, a drug candidate in clinical phase focused on neuropathic pain, and the TrkA-NAM project, which focuses on musculoskeletal pain conditions such as osteoarthritis. In 2022, the Company plans to start a phase IIa study with ACD440, while the TrkA-NAM program will be advanced towards preclinical safety studies, which are needed in the development towards a clinical drug candidate. The Company intends to allocate 40 percent of the amount raised in the Rights Issue for the implementation of the clinical phase IIa study with ACD440 and 28 percent of the amount raised in the Rights Issue for further development of TrkA-NAM.
”The addition of funds to AlzeCure through the Rights Issue enables us to implement several value-creating development stages in all our research platforms, and we are now in the clinical phase in both NeuroRestore and Painless, whereas we currently plan to enter phase II with ACD440. We also continue to work on our licensing strategy and our candidates become more relevant, at the same time as the value of the assets increases, for each step in the development we complete ", said AlzeCure's CEO Martin Jönsson
Summary of the Rights Issue
- One (1) existing share in AlzeCure held on the record date March 4, 2022, entitles to one (1) subscription right. Five (5) subscription rights entitle to subscribe for two (2) newly issued shares.
- The subscription price amounts to SEK 4.00 per share. Payment must be made in cash.
- Through the Rights Issue, AlzeCure can receive a maximum of approximately SEK 60.4 million before issue costs, which are estimated to amount to SEK 9.0 million, of which approximately SEK 4.8 million consists of fees for guarantees.
- The subscription period runs during March 8 – 22, 2022.
- Subscription rights that are not exercised during the subscription period become invalid and lose their value. Trading in subscription rights is planned to take place on the Nasdaq First North Premier Growth Market during the period March 8 – 17, 2022.
- The Rights Issue implies that the Company's share capital increases by a maximum of SEK 377,657.15, corresponding to a maximum of 15,106,286 shares, implying a maximum dilution of 28.6 percent.
- In case all shares are not subscribed for with preferential rights (i e with the support of subscription rights), the Board shall, within the maximum amount of the issue, resolve on the allotment of shares subscribed without the support of subscription rights, whereby allotment firstly shall be made to those who also subscribed for shares exercising subscription rights and, in the event that they cannot receive a full allotment, allotment will be made in relation to their subscription on the basis of exercised subscription rights and, if this is not possible, by drawing lots, and secondly allotment shall be made to those who have subscribed for shares in the issue without the support of subscription rights and, in the event that they cannot receive a full allotment, allotment will be made in proportion to the number of shares each has subscribed for and, if this is not possible, by drawing lots. Ultimately, allocation shall be made to guarantors and in relation to the guarantee commitments made.
- Corresponding allotment criteria apply to the Over-allotment Option
- The Board's resolution on the Rights Issue is conditional that the Extraordinary General Meeting on March 1, 2022, approves the Rights Issue. Notice of the Extraordinary General Meeting is published separately in connection with the publication of this press release.
- The Rights Issue is secured with subscription commitments and guarantee commitments to a total of SEK 48.5 million. The subscription commitments amount to approximately SEK 15.7 million, corresponding to approximately 26.0 percent of the Rights Issue and the guarantee commitments amount to approximately SEK 32.8 million, corresponding to approximately 54.2 percent of the Rights Issue. Subscription and guarantee commitments from management and board members amount to a total of SEK 2.5 million. The subscription and guarantee commitments have been agreed in writing. No compensation is paid for the subscription commitments. For the guarantee commitments, compensation of ten (10) percent of the guaranteed amount is paid. The subscription and guarantee commitments are not secured by bank guarantee, blocking funds, pledges or similar arrangements.
Complete terms and conditions for the Rights Issue and other information about the Company will be available in the EU growth prospectus which is expected to be published around March 7, 2022. The schedule is preliminary and may change, among other things based on the processing time for the current prospectus.
Preliminary schedule for the Rights Issue
March 2, 2022 Last trading day including the right to receive subscription rights
March 3, 2022 First trading day excluding the right to receive subscription rights
March 4, 2022 Record date for participation in the Rights Issue
March 7, 2022 Publication of the prospectus
March 8 – March 22, 2022 Subscription period
March 8 – March 17, 2022 Subscription rights Trading at Nasdaq Premier First North Growth Market
March 25, 2022 Announcement of the outcome in the Rights Issue
Change in share capital and number of shares and dilution
Through the Rights Issue, the share capital in the Company increases by a maximum of SEK 377,657.15, from SEK 944,142.8750 to SEK 1,321,800,025, by the issue of a maximum of 15,106,286 shares. The number of shares thus increases from 37,765,715 to a maximum of 52,872,001 shares. For existing shareholders who do not participate in the Rights Issue, this implies, when fully subscribed, a dilution effect of 28.6 percent of the capital and votes in the Company.
Over-allotment Option
In order to enable additional capital injection if the Rights Issue is oversubscribed, the Board may exercise the Over-allotment Option. Upon full exercise of the Over-allotment Option, the Company will receive an additional SEK 12.0 million. Upon full exercise of the Over-allotment Option, the number of shares in the Company will increase by an additional 3,000,000 shares, subscribed for at a price of SEK 4.00 per share. The exercise of the Over-allotment Option is contingent on resolution by the Board of Directors to issue new shares with the support of the existing authorization to issue new shares.
Approval at the Extraordinary General Meeting
In order to obtain the approval of the Board's issue resolution in a General Meeting, the Board will convene the Company's shareholders to an Extraordinary General Meeting, which is planned to be held on March 1, 2022. Notice of the Extraordinary General Meeting will be published in a separate press release.
Advisor
In connection with the Rights Issue, AlzeCure has hired Erik Penser Bank AB and Synch Advokat AB as financial and legal advisers.
