CombiGene publishes the prospectus for the rights issue

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Jody Walsh
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1 Not for release, publication or distribution, directly or indirectly, in or into the United States, Australia, Hong Kong, Japan, Canada, Singapore, South Africa or New Zealand or any other jurisdiction where such action would be prohibited under applicable law. CombiGene publishes the prospectus for the rights issue CombiGene AB (publ) ( CombiGene or the Company ) publishes this prospectus pursuant to a resolution by the board of CombiGene AB on 22 August 2018 to introduce a preference issue of units ( the Issue ). Full subscription of the offer will generate about MSEK 31.0 before deductions for issuing expenses. If all warrants are exercised, the company will raise between 13.8 and 17.2 million kronor in issue capital before issuing expenses. The issue is guaranteed by guarantee commitments up to about 75 percent of the initial issue volume. The issue and the prospectus in brief - Shareholders in the company have preferential right to subscribe for one (1) unit consisting of ten (10) new shares and two (2) free warrants of series 2018/2019, for every five (5) shares held as of the record date 30 August The subscription period is from 4 September 2018 through 18 September The subscription price per unit is SEK 9 per unit, corresponding to a share price of SEK 0.90 per share. - One subscription warrant entitles the holder to subscribe for one new share in the company at a subscription price of 70% of the volumeweighted average price of the company s share during the period from 15 August 2019 up to and including 28 August The subscription price will not be less than SEK 2.00 per share or exceed SEK 2.50 per share. Subscription for new units may take place during the period 1 September 2019 through 30 September Full subscription of the issue will generate at most about MSEK 31.0 before deductions for issuing expenses and, if all warrants are exercised, the company will raise additionally between 13.8 and 17.2 million kronor in issue capital. - The prospectus is available for downloading at, and - Proceeds from the issue will primarily be used as operating capital for ongoing development of the company s CG01 project, with focus on process development and manufacturing. - The company has received guarantee commitments, from an external consortium of qualified investors, amounting to about 23.2 million kronor (corresponding to about of the issue). The issue is thereby guaranteed up to about 75 percent of the initial issue volume This press release contains insider information which CombiGene AB is obliged to publish according to the EU market abuse regulation (MAR). This information was submitted for publication through the agency of the company s contact person for publication on 24 August

2 Background and purpose CombiGene s business concept is to develop new gene-therapeutic methods for treating diseases with greater precision, greater effect and fewer side effects. The company s long-term objective is to develop gene-therapy-based treatment methods for patients with difficult-to-treat diseases where there is an expressed medical demand. CG01 is primarily intended for epilepsy patients whose condition cannot to a satisfactory degree be alleviated with existing treatment methods, and secondarily as an alternative for all patients who suffer from focal seizures. During 2018, together with CGT Catapult, the company intends to continue to develop a manufacturing process for CG01 with an aim, during 2019, to producing material of the quality standard required to subsequently initiate the necessary biodistribution and toxicity studies. This is a prerequisite for starting the clinical phase-l/ll study. Milestones for the first half-year 2018 CGT Catapult participates in a project to develop manufacturing processes for CombiGene s candidate drug, CG01, a gene therapy for treating epilepsy. The aim is to develop a complete and finalized manufacturing method that will enable commercial GMP manufacturing and subsequent clinical trials. To ensure that collaboration with Catapult runs as smoothly as possible, the board of CombiGene decides to establish a subsidiary in London, UK. Eventually, the subsidiary will also establish a stronger presence on the UK market, which is one of Europe s largest market for pharmaceuticals. Horizon 2020, the EU framework programme for research and development, announced that it will invest 3.36 million euros in CombiGene s ongoing development and commercialization of the company s gene therapy project focussing on difficult-to-treat epilepsy. Data from the preclinical long-term study on CombiGene s candidate drug for treating epilepsy indicate positive effects in the form of fewer seizures. A couple of the animals were completely free of seizures after being treated. CombiGene participated in a meeting with the European Medicines Agency (EMA). The discussions were open and positive, and CombiGene received much valuable input with respect to the ongoing development of CG01. Objectives for the second half of 2018 Pursue process development for CG01. Business development with an aim to adding further gene therapy projects. Participate in a partnering conference with an aim to maintaining established contacts and building new relations with potential partners. Objectives 2019 Production of material for the necessary biodistribution and toxicity studies. Initiate biodistribution and toxicity studies. Business development with an aim to adding further gene therapy projects. The reason for the preference issue, which amounts to about MSEK 31.0 before issuing expenses, is primarily to raise operating capital for ongoing development of the company s CG01 project with focus on process development and manufacturing. Provided that the issue is subscribed to a sufficient degree, part of the capital raised will be applied to continued development of the company s preclinical project. The remainder of the capital will be used to secure a patent portfolio, for business development and for the company s current expenses and capital buffer. 2

3 The company is of the view that, according to the company s business plan, operating capital for the coming twelve months is lacking, and the preference issue is included in the company s plan for covering the operating capital requirement together with the Horizon 2020 contribution. If the preference issue is not fully subscribed, the company will focus mainly on development of CG01 and business development. Use of proceeds from the issue Use of initial proceeds from the issue The reason for the preference issue, which amounts to about MSEK 31.0 before issuing expenses, is primarily to fund ongoing development of the company s CG01 project with focus on process development and manufacturing. Net proceeds (up to about MSEK 25.4, after deductions for issuing expenses, and remuneration for guarantee commitments totalling about MSEK 5.6) will be distributed in order of priority as follows: 1. CG01 project: approx. 55 percent 2. Expenses for ongoing operations and capital buffer: approx. 20 percent 3. Other research: approx. 15 percent 4. Business development: approx. 10 percent Use of proceeds from utilization of warrants Issue proceeds from warrants of series 2018/2019 will mainly be used to fund the company s ongoing preparation for the CG01 clinical study. Net proceeds, which are expected to be forthcoming during September and October 2019, (up to between about MSEK 13.3 and MSEK 16.6, after deductions for issuing expenses totalling between about MSEK 0.5 and MSEK 0.6) will be distributed in order of priority as follows: 1. CG01 project: approx. 55 percent 2. Expenses for ongoing operations and capital buffer: approx. 20 percent 3. Other research: approx. 15 percent 4. Business development: approx. 10 percent In the event that this preference issue is not fully subscribed, the company will consider other financing alternatives, such as further capital acquisition, contributions or funding, or reduce operations until such time as additional capital can be acquired. The issue The board has resolved to carry out an issue of units consisting of shares and warrants. Via the issue, the company s share capital will increase by at most SEK 3,439,565 via an issue of at most 34,395,650 shares, corresponding to dilution of 66.7 percent for the shareholders who choose not to participate in the issue. In addition, 6,879,130 subscription warrants will be issued, each of which entitles the holder to subscribe for one share in the company during the period from 1 September 2019 through 30 September If all warrants are exercised, the company s share capital will increase by at most SEK 687,913 via an issue of at most 6,879,130 shares, corresponding to dilution of 11.8 percent for the shareholders who choose not to participate in the issue. Full subscription of the offer will generate about MSEK 31.0 before deductions for issuing expenses, which are estimated at about SEK 5.6 million, of which guarantee expenses account for about 2.3 million kronor. If the issue is fully subscribed and all warrants are exercised, the company will raise about an additional SEK million before deductions for issuing expenses, which are estimated at about SEK million. As of record day 30 August 2018, the company s 3

4 shareholders will have preferential right to subscribe for units in relation to their shareholdings in the company. For each share held in the company as of the record date, shareholders will receive one (1) unit right. Five unit rights (5) entitle the holder to subscribe for one (1) unit consisting of ten (10) new shares and two (2) free warrants of series 2018/2019. The subscription price per unit is SEK 9 per Unit, corresponding to a share price of SEK 0.90 per share. Subscription for units will be made during the period 4 September September Subscription with subscription rights shall be settled by cash payment. Subscription without subscription rights shall be made using the special subscription form. Payment for units subscribed for without unit rights will be made in cash no later than the third business day after notification of allotment has been issued to the subscriber. The board of directors reserves the right to extend the subscription period and the payment period. During the subscription period the prospectus, subscription forms and other relevant information related to the preference issue will be available at the company s office and on the company s website,. The prospectus will also be available on the Swedish Financial Supervisory Authority s website, Stockholm Corporate Finance AB s website, and on Hagberg & Aneborn Fondkommission AB s website, Subscription and guarantee commitments The company has received guarantee commitments, from an external consortium of qualified investors, amounting to about 23.2 million kronor (corresponding to about of the issue). The issue is thereby guaranteed up to about 75 percent of the initial issue volume Scheduling of the issue (all dates refer to 2018) 30 August Record day for allotment of unit rights 4 14 September Trade in unit rights on Spotlight Stock Market 4 September 18 August Subscription period (subscription via payment) 4 September Trade in BTU begins and continues until the issue has been registered with Bolagsverket (the Swedish Companies Registration Office). 4

5 Advisors The financial adviser is Stockholm Corporate Finance. The legal adviser is Fredersen Advokatbyrå AB. Hagberg & Aneborn Fondkommission AB is acting as the issuing institution in connection with the issue. For further information, please contact: Jan Nilsson, CEO CombiGene AB (publ) Tel: +46 (0) Otto Rydbeck, CEO Stockholm Corporate Finance Tel: +46 (0) This press release contains information which CombiGene AB is obliged to publish according to the EU market abuse regulation (MAR). This information was submitted for publication through the agency of the company s contact person for publication on 22 August About CombiGene AB By combining modern neuroscience with recent advances in gene delivery, CombiGene has developed a method shown to suppress epileptic seizures in preclinical studies. The company s current focus is on developing this treatment method for the benefit of epilepsy patients, but the method can also be potentially developed for use in the treatment of other neurological diseases. CombiGene, which has offices in Medicon Village in Lund, Sweden, was founded on the basis of the results of research conducted at Lund University and the University of Copenhagen. The company is listed on Spotlight Stock Market (formerly AktieTorget).. Stockholm Corporate Finance Stockholm Corporate Finance is a Swedish, independent and privately-owned financial advisor which offers financial advisory services in capital acquisition, changes in ownership, acquisitions, mergers and divestment in listed and privately held companies. Stockholm Corporate Finance is the exclusive Swedish partner in the global network M&A Worldwide, which consists of 51 M&A advisers and investment banks in 45 countries. Stockholm Corporate Finance is under the supervision of the Swedish Financial Supervisory Authority, Finansinspektionen, and is a member of the trade association SwedSec Licensiering AB. For more information: 5

6 PRESSMEDDELANDE Important information Not for release, publication or distribution, directly or indirectly, in or into the United States, Australia, Hong Kong, Japan, Canada, Singapore, South Africa or New Zealand or any other jurisdiction where such action would be prohibited under applicable law. See below. This document has not been subject to approval by any regulatory authority. This document is a press release and not a prospectus, and investors should not subscribe for or purchase securities referred to in this document except on the basis of information contained in the prospectus, which has been approved by Finansinspektionen (Sweden s financial supervisory authority) and is available at www. combigene.com. Distribution of this press release may, in certain jurisdictions, be subject to restrictions. The recipients of this press release in jurisdictions where this press release has been published or distributed shall inform themselves of, and comply with, such restrictions. The information in this press release does not constitute an offer, or a solicitation of any offer, to buy or sell shares, nor will any sale of the herein referred to securities be made in any jurisdiction where such an offer, solicitation to purchase or sell securities requires the issuance of a new prospectus or other documentation in respect of the offering, or would be prohibited without registration or applicable exemption from registration according to the securities legislation in such a jurisdiction. This press release neither constitutes, nor constitutes a part of, an offer or a solicitation of an offer to purchase or subscribe for securities in the United States. The herein referred to securities have not and will not be registered in accordance with the Securities Act of 1933 ( Securities Act), and may not be offered or sold in the USA without registration in accordance with the Securities Act or an exemption from registration. The herein referred to securities will not be offered for public sale in the USA. Copies of this press release will not and may may not be distributed, directly or indirectly, in whole or in part, to the United States, Canada, Australia, South Africa, Japan, Hong Kong, Singapore, New Zealand or in any other jurisdiction where the distribution of the press release would not comply with applicable laws and regulations. About CombiGene AB By combining modern neuroscience with recent advances in gene delivery, CombiGene has developed a method shown to suppress epileptic seizures in preclinical studies. The company s current focus is on developing this treatment method for the benefit of epilepsy patients, but the method can also be potentially developed for use in the treatment of other neurological diseases. CombiGene, which has offices in Medicon Village in Lund, Sweden, was founded on the basis of the results of research conducted at Lund University and the University of Copenhagen. The company is listed on Aktie- Torget.. For further information, please contact: CCombiGene AB (publ) Jan Nilsson, CEO Tel: +46 (0) jan.nilsson@combigene.com MORE FROM THE COMPANY and CombiGene s newsletter, Ingeneious, contain general news and information that is judged not to have a significant effect on the share price. Other issues of MORE FROM THE COMPANY and PRESS RELEASES are available at 6

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