Publication of prospectus in connection with a new share issue and listing of Sedana Medical’s shares on Nasdaq First North

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES, AUSTRALIA, CANADA, NEW ZEALAND, HONG KONG, JAPAN, SINGAPORE, SOUTH AFRICA, SOUTH KOREA OR ANY OTHER JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL OR WOULD REQUIRE REGISTRATION OR ANY OTHER MEASURES. PLEASE REFER TO IMPORTANT INFORMATION AT THE END OF THE PRESS RELEASE.

Sedana Medical AB (publ) (”Sedana Medical” or the ”Company”), a medical technology company on its way to also become a pharmaceutical company, announced on the 31 May, 2017 its intention to launch an initial public offering and list its shares on Nasdaq First North (the ”Offering”). Today the Company publishes the prospectus for the Offering. 

• The Offering comprises 5,128,205 new shares, corresponding to a dilution of 31.5 percent.[1]
• In order to cover any overallotment, the Company has committed to, upon Pareto Securities’ request, issue a maximum of an additional 769,230 new shares in the Company, corresponding to up to 15 percent of the total shares offered in the Offering.
• If the overallotment option is fully utilized, the Offering will comprise a maximum of 5,897,435 new shares, corresponding to a dilution of 34.5 percent.1 
• The Offering will be conducted at a fixed price of SEK 19.50 per share, corresponding to a total value of the Company’s outstanding shares of approximately SEK 206 million, before the Offering.[2] 
• The new share issue being conducted as a part of the Offering is expected to render proceeds of SEK 100–115 million to the Company before transaction costs, depending on the extent of the exercise of the overallotment option.
• The Offering is directed to the general public in Sweden and institutional investors in Sweden and internationally.
• Sedana Medical has applied for listing of the Company’s shares on Nasdaq First North in Stockholm. Expected first day of trading of Sedana Medical’s share is June 21, 2017, under the ticker “SEDANA” and expected settlement day is June 22, 2017.
• A prospectus with the full terms and conditions of the Offering is published today June 7, 2017 and is available on Sedana Medical’s and Pareto Securities’ website. 
• Pareto Securities is acting as sole manager and bookrunner, Setterwalls is the Company’s legal advisor and Roschier is Pareto Securities legal advisor in connection with the Offering.
• Cornerstone investors, shown in the table below, have, against the Company and Pareto Securities agreed to, on certain terms and to the same price as other investors, acquire shares in the Offering. Cornerstone investors are committed to acquiring shares in the Offering for a total of SEK 55 million, corresponding to 47.8–55.0 percent of the shares in the Offering. The interval indicates the cornerstone investors’ share in the Offering at fully or no utilization of the overallotment option respectively.

Background to the Offering

Sedana Medical is a medical technology company active within the field of sedation (treatment with sedative drugs). The Company has for a long time sold the medical device AnaConDa, which for the first time enables inhalation sedation in the intensive care setting. The therapy is widely supported by medical literature showing its many advantages over the current standard intravenous sedation. No pharmaceutical company has up until now applied for registration of the indication of inhalation sedation in the intensive care and use for this indication is thus considered off label and may currently not be marketed.

The main rationale for pursuing the Offering is to fund the ongoing clinical registration study for Sedana Medical’s drug candidate IsoConDa in Europe. The study is a non-inferiority study, in which the study has to demonstrate that IsoConDa (isoflurane) is not inferior to propofol, which is currently the standard of care. The study, which will include up to 550 patients, was initiated in the fourth quarter of 2016 and is scheduled to end in the fourth quarter of 2018. The aim of the study is initially to obtain marketing approval for IsoConDa in Europe, which is expected to occur in the fourth quarter of 2019. Subject to obtaining marketing approval, Sedana Medical is expected to be the first company in the world to offer an approved solution for inhalation sedation in the intensive care. In addition, the Company is planning to use part of the proceeds from the Offering to fund clinical trials and registration processes for IsoConDa and AnaConDa in the United States, a process scheduled to start in 2017.

Sedana Medical's board of directors and management believe that the Offering and listing constitute an important step in the Company's development and is expected to increase awareness among current and potential partners, customers and opinion leaders in the medical technology and pharmaceutical industry. The Offering and listing is also expected to benefit Sedana Medical's future growth by improving the Company's access to Swedish and international capital markets, which in turn is expected to support the Company's continued development plan and studies. For these reasons, Sedana Medical's board of directors has applied to list the Company's shares on Nasdaq First North.

Prospectus and application form

Prospectus and application forms are published on Sedana Medical’s website www.sedanamedical.com and on Pareto Securities’ website www.paretosec.se/emissioner. Applications can also be made through Avanza’s internet service www.avanza.se.

Preliminary timetable

The market in brief 

Sedana Medical's market consists primarily of mechanically ventilated intensive care patients. The market for sedation of mechanically ventilated intensive care patients today consists of established drugs that are administered intravenously. The target group that the Company focuses on are those patients who are ventilated for more than 24 hours, a target group that globally amounts to between two and four million patients per year. In total, the Company consider this to be an addressable market of SEK 10-20 billion per year, of which Europe accounts for about SEK 6 billion.

Financial overview and targets

The Company has experienced strong financial development in recent years and has grown with an average annual growth rate of about 30 percent since 2010. In 2016, the Company showed, for the first time in its history, a positive full-year result.

During the period up until the approval of IsoConDa is obtained, the Company's target is to increase sales with an average of over 20 percent per year while maintaining an operating profit before depreciation and amortization (EBITDA) that is not materially negative, in parallel to building up a larger sales and market organization.

Provided that an approval of IsoConDa in Europe is obtained by the end of 2019, the Company's target is to reach a turnover exceeding SEK 500 million and an EBITDA margin of 40 percent in 2022.

* Gross margin is defined as (total income - cost of goods sold) / total income

Advisers 

Pareto Securities AB is acting sole manager and bookrunner in connection with the Offering. Setterwalls Advokatbyrå AB is legal adviser for the Company and Roschier Advokatbyrå AB is legal adviser for Pareto Securities AB.

For additional information, please contact:

Christer Ahlberg, CEO, Sedana Medical AB

Mob: +46 70 675 33 30

E-mail: Christer.ahlberg@sedanamedical.com  

Thomas Eklund, Chairman of the Board, Sedana Medical AB

Mob: +46 70 824 20 25

E-mail: Thomas.eklund@investorab.com 

Important information

This announcement is not and does not form a part of any offer for sale of securities. Copies of this announcement are not being made and may not be distributed or sent into the United States, Australia, Canada, New Zealand, Hong Kong, Japan, Singapore, South Africa, South Korea or any other jurisdiction in which such distribution would be unlawful or would require registration or other measures. The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and accordingly may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws. The Company does not intend to register any offering in the United States or to conduct a public offering of securities in the United States.

Any offering of securities referred to in this announcement will only be made by means of a prospectus. This announcement is not a prospectus for the purposes of Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the “Prospectus Directive”). Investors should not invest in any securities referred to in this announcement except on the basis of information contained in the aforementioned prospectus. In any EEA Member State other than Sweden that has implemented the Prospectus Directive, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State.

This communication is only being distributed to and is only directed at persons in the United Kingdom that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “Relevant Persons”). This communication must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this communication relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as “believe,” “expect,” “anticipate,” “intends,” “estimate,” “will,” “may,” "continue," “should” and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice.

[1] The dilution is based on the total number of outstanding shares after the Offering adjusted for the convertibles and shareholder loan that will be converted to shares in conjunction with the Offering. In total, the conversions will result 2,495,103 new shares (convertibles 1,881,509 and conversion of shareholder loan 613,594), which will be issued in addition to the new share issue exercised in conjunction with the Offering. This gives a total number of outstanding shares after the completion of the Offering of 16,303,308 or 17,072,538 at no or fully utilized overallotment option respectively.

[2] The valuation is based on the number of outstanding shares before the Offering, adjusted for the Company’s convertibles that will be converted into 1,881,509 new shares in conjunction with the Offering (strike price of SEK 2.50), which gives a total of 10,561,509 outstanding shares before the new share issue that is expected to take place in conjunction with the Offering. The value of the Company’s outstanding shares, before the Offering but including 1,040,000 outstanding warrants (strike price of SEK 2.50) amounts to SEK 226 million. In addition, the Company has an outstanding shareholder loan, which will be converted into 613 594 new shares in conjunction with the Offering (at a price equivalent to the offering price), as well as a new warrant program, which entitles the holders to subscribe for 310 149 new shares at 130 percent of the offering price.

[3] Excluding the overallotment option. 

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Sedana Medical AB (publ) is a Swedish company that develops, manufactures and sells the medical device AnaConDa. AnaConDa is a medical device for inhalation sedation of mechanically ventilated patients in intensive care units. At the end of 2016, the company initiated a major clinical study to receive market approval in Europe for IsoConDa (isoflurane) for inhalation sedation in intensive care units. The study is expected to end in late 2018. Registration is expected at the end of 2019. Sedana Medical has sales offices in Germany, Spain and France, as well as external distributors in Europe, the Middle East, Canada, Australia and South Korea. The headquarters is based in Danderyd, Sweden and the company has R&D operations in Ireland. 

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