BullsEye Insights

BullsEye: Daily London AIM RNS Round-Up

Thursday 04 June 2020


Here is our summary of the day's hottest RNS alerts from across London's Alternative Investments Market (AIM).


Avacta Group (AVCT.LSE)

Proposed Fundraising to raise up to £45 million

Avacta Group plc, the developer of Affimer® biotherapeutics and reagents , announced in response to substantial institutional interest, its intention to raise gross proceeds of up to £45 million by means of a placing  to institutional and other investors, a direct subscription with the Company and offers to retail and other investors via the PrimaryBid platform of up to 37,500,000 new ordinary shares of 10 pence each in the Company, in each case at a price of 120 pence per share.


The Issue Price is at a discount of approximately 4.4 per cent to the 30 day volume weighted average price of the Ordinary Shares on AIM on 3 June 2020 , being 125.3 pence per Ordinary Share.

The Placing will be conducted through an accelerated bookbuilding process which will be launched immediately following this announcement.


finnCap is acting as nominated adviser and finnCap, Zeus Capital and Beech Hill Securities are acting as joint brokers with regards the Placing.

It is proposed that the Fundraising will comprise of an element of New Ordinary Shares that will be allotted pursuant to existing authorities and powers to allot shares on a non-pre-emptive basis and be admitted to trading on AIM on 10 June 2020.  The allotment of the balance of shares (if any) to be issued in connection with the Fundraising will be subject to, amongst other things, Shareholder's approval, with a circular to Shareholders expected to be despatched shortly. 

None of the Placing, the Subscription or PrimaryBid Offers is to be underwritten.

The final number of New Ordinary Shares to be issued pursuant to the Placing will be agreed by the Joint Brokers and the Company at the close of the bookbuild, and the results of the Placing will be announced as soon as practicable thereafter. The timing for the close of the bookbuild and the allocation of New Ordinary Shares shall be at the absolute discretion of the Joint Brokers, in consultation with the Company. The Company and the Joint Brokers reserve the right to issue and sell a greater or lesser number of shares through the Placing.


BACKGROUND TO AND REASONS FOR THE FUNDRAISING

Pursuant to the Fundraising, the Company proposes to raise up to £ 45 million (before expenses) to fund the rapid scale-up of the broader Affimer ® diagnostic products opportunities including COVID-19 antigen rapid testing and accelerated expansion of the in-house Affimer ® and pre|CISION™ cancer therapy pipeline.

Use of Proceeds

Rapid Scale-up of Diagnostics Business, £ 10 million:

  • Working capital for the COVID-19 testing opportunity

  • Expansion of in-house diagnostics product development capabilities including facilities, capital equipment; scientific, commercial and senior leadership teams

  • Acceleration of broader diagnostics product pipeline and commercial partnerships

Accelerated Expansion of Pipeline of Differentiated Cancer Therapies, £35 million:

  • Rapidly growing the pre|CISION™ pre-clinical pipeline and delivering pre-clinical packages for several pro-drugs (pre|CISION™  velcade, paclitaxel and oxaliplatin).

  • Expanding the Affimer ® immunotherapy pipeline (PDL1-TGFβ inhibitor and PDL1-cytokine bispecifics).

  • IND/CTA filings for one or more Affimer immunotherapies (TMAC drug conjugate (PDL1-IDASH) or first bispecific candidate) and one or more pre|CISION pro-drugs.

  • Obtain first-in-human data for the Affimer® platform.

  • UK phase I clinical trial for first pre|CISION™ chemotherapy AVA6000 pro-doxorubicin covered by current balance sheet. Proceeds will fund IND filing AVA6000.

For the full RNS, see: https://investegate.co.uk/avacta-group-plc--avct-/rns/proposed-fundraising-to-raise-up-to--45-million/202006040700079454O/

Mereo BioPharma Group (MPH.LSE)

Completion of $70 Million Private Placement

Mereo BioPharma Group plc today announced the completion of a $70 million (£56 million) private placement with a number of new and existing U.S based institutional and accredited investors. OrbiMed led the Fundraising with participants including Vivo Capital, Surveyor Capital, Pontifax Venture Capital, Samsara BioCapital, Commodore Capital, and funds managed by Janus Henderson Investors alongside existing investors Boxer Capital of Tavistock Group and Aspire Capital Fund, LLC.

Highlights

  • Private placement completed raising $70.0 million (£56.0 million) before expenses.

  • New Ordinary Shares and Convertible Loan Notes issued provide the Company with certainty of receiving the full amount of the proceeds of the private placement at closing. 89,144,630 new Ordinary Shares have been placed at the Issue Price to raise $19.4 million (£15.5 million) before expenses, utilising share authorities granted on 2 June 2016 and 19 June 2019 and issued on a non-pre-emptive basis. Convertible Loan Notes have been issued in an aggregate principal amount $50.6 million (£40.5 million) to complete the Fundraising.

  • Price per Placing Share of 17.4 pence.

  • Investors  have received conditional Warrants to subscribe for further Ordinary Shares in an aggregate number equal to 50 per cent of both the new Ordinary Shares purchased by that investor in the Placing and the Ordinary Shares issuable upon conversion of the Convertible Loan Notes purchased by that investor in the Fundraising, with an exercise price of 34.8 pence per Warrant. The Warrants will be capable of being exercised for a period of 3 years after the date on which the Resolutions are passed.

  • SVB Leerink acted as the exclusive placement agent to the Company in connection with the Fundraising.

Mereo is also announcing today plans to advance etigilimab (Anti-TIGIT) into a Phase 1b study in Q4 2020 alongside progressing its rare disease product portfolio. This is based on the Company's existing promising clinical data with etigilimab as well as the increasing interest in TIGIT as an immuno-oncology target. The Company intends to complete a strategic partnership for setrusumab for the treatment of osteogenesis imperfecta ("OI") prior to initiation of the pivotal Phase 3 study and to complete the ongoing Phase 2 study of alvelestat for the treatment of alpha-1 antitrypsin deficiency ("AATD"), with topline data currently expected in 2H 2021.

Dr. Denise Scots-Knight, Chief Executive Officer of Mereo, said, "We are delighted to have attracted the support of such a broad range of high-quality institutional investors. We are pleased to also be announcing today that we plan to progress etigilimab into a Phase 1b study and believe etigilimab has the potential to target a significant unmet need in oncology. We look forward to progressing etigilimab, setrusumab and alvelestat further and believe this Fundraising leaves Mereo extremely well placed to progress on our strategy."

Etigilimab (Anti-TIGIT)

Etigilimab is an antibody against TIGIT (T-cell immunoreceptor with Ig and ITIM domains). TIGIT is a next generation checkpoint receptor shown to block T-cell activation and the body's natural anti-cancer immune response. Etigilimab is an IgG1 monoclonal antibody which binds to the human TIGIT receptor on immune cells with a goal of improving the activation and effectiveness of T-cell and NK cell anti-tumor activity. Mereo completed a Phase 1a dose escalation clinical trial with etigilimab in patients with advanced solid tumors and enrolled patients in a Phase 1b study in combination with nivolumab in selected tumor types.

23 patients were treated in the Phase 1a dose escalation study with doses up to 20mg/kg Q2W. Tumor types included colorectal cancer, endometrial cancer, pancreatic cancer and other tumor types. No dose limiting toxicities were observed. In the Phase 1b combination study, a total of ten patients, nine of whom had progressed on prior anti-PD1/PD-L1 therapies were enrolled at doses of 3, 10, and 20 mg/kg. Eight patients were evaluable for tumor growth assessment, and all of these patients had progressed on PD1/PD-L1 therapies with best responses including two patients with a partial response and stable disease. Patients remained on study for up to 224 days. No dose limiting toxicities (DLTs) were observed and the most common related adverse events included fatigue, rash, and pruritis.

The Company

Mereo BioPharma is a biopharmaceutical company focused on the development and commercialization of innovative therapeutics that aim to improve outcomes for oncology and rare diseases. Mereo's lead oncology product candidate, etigilimab ("Anti-TIGIT"), has completed a Phase 1a dose escalation clinical trial in patients with advanced solid tumors and has been evaluated in a Phase 1b study in combination with nivolumab in select tumor types. Mereo's rare disease product portfolio consists of setrusumab, which has completed a Phase 2b dose-ranging study in adults with osteogenesis imperfecta ("OI"), as well as  alvelestat, which is being investigated in a Phase 2 proof-of-concept clinical trial in patients with alpha-1 antitrypsin deficiency ("AATD").

Use of Proceeds

The net proceeds from the Fundraising will be used primarily to fund clinical development activities of the Company's lead product candidates and for general corporate purposes. The Company will utilise $13 million (£10.4 million) to reduce current indebtedness (including interest) of $17.6 million (£14.1 million).  In the absence of the receipt of any other income, the Board expects that the resulting net proceeds of the Fundraising will fund the Company into 2022.

None of the proceeds of the Fundraising will be used to make any dividend or distribution, or repurchase shares from any shareholder.


For full RNS details, see: https://investegate.co.uk/mereo-biopharma-grp--mph-/rns/completion-of--70-million-private-placement/202006040700079504O/

Tiziana Life Sciences (TILS.LSE)

Anti-CD3 for Alzheimer Disease

Tiziana Life Sciences plc, the biotechnology company focused on innovative therapeutics for oncology, inflammation and infectious diseases, announced that the Chairman of the Company's Scientific Advisory Board, Dr. Howard Weiner, has received a competitive research grant from the National Institutes of Health (NIH) to investigate nasal anti-CD3 for the treatment of Alzheimer's disease.

The demonstration that nasally administered anti-CD3 retards disease processes underlying the progression of Alzheimer's disease in animal models, further expands clinical development of nasally administered Foralumab, the only entirely human anti-CD3 monoclonal antibody, for the potential treatment of Alzheimer's and other neurodegerative diseases in humans.

The Company has a worldwide exclusive license for nasal administration of anti-CD3 mAbs for treatment of neurodegenerative diseases, including Alzheimer's disease, from Brigham and Women's Hospital, Harvard Medical School, Boston. To date the Company has successfully completed two phase 1 trials and intends to initiate two phase 2 trials with nasally and orally administered Foralumab shortly for treatment of progressive multiple sclerosis (pro-MS) and Crohn's disease, respectively.


"Nasal administration of Foralumab is a potentially revolutionary approach to treat patients with Alzheimer's disease. Preclinical animal studies have established that nasal administration of anti-CD3 can modulate brain microglia and ameliorate disease in animal models. This is a major scientific advancement that provides the basis to move forward with clinical development of nasally administered Foralumab in Alzheimer's disease," commented Dr. Weiner, who is the Robert L. Kroc Professor of Neurology at the Harvard Medical School, Director and Founder of the Partners Multiple Sclerosis Center and Co-Director of the Ann Romney Center for Neurologic Diseases at the Brigham & Women's Hospital. "Targeting microglia with nasal anti-CD3 is a first-in-class immunotherapeutic approach to treat Alzheimer's disease."


Alzheimer's disease is the most common cause of dementia, which affects millions of people worldwide. It is now recognized that brain microglia have a critical role in Alzheimer's disease.  In an unexpected discovery, Dr. Weiner found that nasal anti-CD3 modulates brain microglia in animal models. Treatment with anti-CD3 is known to stimulate T regulatory (Tregs) cells, which have the ability to cross the blood-brain barrier. The effect of nasal anti-CD3 in dampening microglial activation led Dr. Weiner's team at the Ann Romney Center for Neurologic Diseases at Brigham and Women's Medical Center to evaluate nasally administered Foralumab for pro-MS . In 2019, Dr. Weiner successfully completed a Phase 1 study with nasally administered Foralumab in healthy volunteers in a dose-ranging trial. A subsequent Phase 2 trial in patients with pro-MS will be initiated shortly.

"Alzheimer's disease is considered to be the disease of the century, presenting multiple challenges and limited therapeutic successes so far," added Gabriele Cerrone, Chairman and Founder of Tiziana Life Sciences. "For this reason, combined with Dr. Weiner's expertise and the encouragement by the NIH to explore it, we are excited to further expand our proprietary novel approach to treat neurodegerative diseases with nasal administration of Foralumab, a first-in-class approach that has shown retardation of Alzheimer's disease progression in preclinical models."


For full RNS details, see: https://investegate.co.uk/tiziana-life-sci-plc--tils-/rns/anti-cd3-for-alzheimer-disease/202006040700068937O/

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