ExpreS2ion announces a fully guaranteed rights issue of approximately SEK 73 million

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, WITHIN OR TO THE UNITED STATES, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND, SOUTH AFRICA, SOUTH KOREA, SWITZERLAND OR IN ANY OTHER JURISDICTION WHERE SUCH RELEASE, DISTRIBUTION OR PUBLICATION WOULD BE UNLAWFUL OR WOULD REQUIRE REGISTRATION OR ANY OTHER MEASURES.

INSIDE INFORMATION: Hørsholm, Denmark, 6 April 2022 – The Board of Directors of ExpreS2ion Biotech Holding AB (publ) (“ExpreS2ion” or the “Company”) has today, on the basis of the authoriztion from the Annual General Meeting on 26 May 2021, resolved to carry out a new share issue with preferential rights for the Company’s existing shareholders (the “Rights Issue”). The Rights Issue encompasses 5,841,273 shares at a subscription price of SEK 12.50. The Rights Issue is fully covered by subscription undertakings made by certain existing shareholders and guarantee commitments from existing shareholders and new investors. The Company will upon full subscription of the Rights Issue receive gross proceeds of approximately SEK 73 million. The expected net proceeds from the Rights Issue will be used as to advance the breast cancer vaccine candidate ES2B-C001 to completion of the preclinical safety studies, advance other pipeline development projects, including within Influenza and Malaria, and support the strategic CRO business and invest in core technologies and IP to strengthen competitive edge.

The Rights Issue in brief

• The maximum number of shares that may be issued is 5,841,273. The subscription price is SEK 12.50 per share. The Company will receive proceeds of approximately SEK 73 million before deduction of costs attributable to the Rights Issue, which is expected to amount to approximately SEK 12.3 million.

• The subscription price of SEK 12.50 per share corresponds to a discount of approximately 31 percent compared to the 10 days volume-weighted average price ("VWAP") on Nasdaq First North Growth Market Stockholm.

• Those who are registered as shareholders in ExpreS²ion's share register on the record date receive three (3) subscription rights for every eight (8) shares held in ExpreS²ion. Where two (2) subscription rights entitle to subscription for one (1) new share.

• Record date for participation in the Rights Issue is 13 April 2022.

• Subscription period of the Rights Issue runs from 19 April up until 3 May 2022.

• The Rights Issue is fully guaranteed through subscription commitments of approximately SEK 1.8 million, corresponding to approximately 2.5 percent of the Rights Issue, and guarantee undertakings of approximately SEK 71.2 million, corresponding to approximately 97.5 percent of the Rights Issue. Members of the Board of Directors and the senior management have committed to subscribe for new shares.

• The expected net proceeds from the Rights Issue will be used as to (i) advance the breast cancer vaccine candidate ES2B-C001 to completion of the preclinical safety studies (approximately 50 percent), (ii) advance other pipeline development projects, including within Influenza and Malaria, and support the strategic CRO business (approximately 25 percent), (iii) and invest in core technologies and IP to strengthen competitive edge (approximately 25 percent).

• A prospectus regarding the Rights Issue is expected to be published on 13 April 2022.

Bent U. Frandsen, CEO in ExpreS²ion says:

“Our company continues moving up the biopharmaceutical value chain, now with a clinical Phase III-ready unique COVID-19 vaccine asset and with exclusive license rights to carry on development of a proprietary breast cancer vaccine asset, which we have recently proven preclinical proof-of-concept of. We are committed to progressing our own drug candidates, with the knowledge of the larger investments needed to de-risk the assets. On this basis, we expect higher returns for our shareholders, most recently shown during 2021’s significant pipeline advancements across our pipeline of vaccine candidates for infectious diseases and cancer. The board, our employees and I greatly appreciate the support from our investors and look forward to pursuing the next exciting steps in the company’s life.”

Rationale for the Rights Issue

In February 2022, ExpreS²ion received constructive feedback from a scientific advice meeting with the Danish Medicines Agency (DKMA) for an additional preclinical safety study to increase the robustness of the breast cancer vaccine candidate’s (ES2B-C001) preclinical data. The Company is currently preparing ES2B-C001 for the remaining preclinical safety studies, expected to be completed in mid-2023, and the first in human trial, expected to be initiated in 2024. Furthermore, the Company intends to expand the pipeline, by developing new candidates. Additionally, the Company intends to further develop the ExpreS2 platform. Capital is required to complete the preclinical trials of ES2B-C001 and advance the project towards clinical trials. Furthermore, capital is needed to further expand the Company’s pipeline by including additional projects through license acquisition or inhouse development, and to improve the technology platform to ensure continued competitiveness.

Use of Proceeds

If the Rights Issue is fully subscribed, the Company will receive net proceeds of approximately SEK 60.7 million. The costs attributable to the Rights Issue are expected to amount to approximately SEK 12.3 million (including paid commission to the guarantors). The Company intends to use the net proceeds from the Rights Issue for GMP manufacturing scaling and the remaining preclinical safety studies for ES2B-C001, as well as improving its technology platforms and ongoing operations.

The expected net proceeds from the Rights Issue will be used as follows (stated in  order of priority, and approximate amounts are stated in brackets):  

• Advance the breast cancer vaccine candidate ES2B-C001 to completion of the preclinical safety studies (approximately 50 percent).

• Advance other pipeline development projects, including within Influenza and Malaria, and support the strategic CRO business (approximately 25 percent).

• Invest in core technologies and IP to strengthen competitive edge (approximately 25 percent).

Terms of the Rights Issue

The Board of Directors has today, pursuant to the authorization granted by the Annual General Meeting on 26 May 2021, resolved to carry out the Rights Issue by issuing a maximum of 5,841,273 shares. Shareholders registered in the Company’s shareholder register on the record date have pre-emptive rights to subscribe for new shares in the Rights Issue. Eight (8) existing shares held on the record date of 13 April 2022, entitles to three (3) subscription rights. Two (2) subscription rights entitles to subscription of one (1) new share. The subscription price is 12.50 per share, which means that ExpreS²ion, provided that the Rights Issue is fully subscribed, will receive approximately SEK 73 million before deduction of costs attributatble to the Rights Issue, which is expected to amount to approximately SEK 12.3 million (including paid commission to the guarantors). Subscription of new shares with use of subscription rights shall be made by cash payment during the period 19 April – 3 May 2022. Application for subscription of new shares without use of subscription rights shall be made during the same period.  Subscription rights that are not utilized during the subscription period will become invalid and lose their value. Trading in subscriptions rights is expected to take place on Nasdaq First North Growth Market during 19 April - 28 April 2022.

If all of the new shares are not subscribed for with subscription rights, the Board of Directors will decide on allotment of new shares subscribed for without subscription rights. Allotment will then be made firstly to persons who have applied for subscription without subscription rights and who have subscribed for new shares with subscription rights, regardless of whether or not the subscriber was a shareholder on the record date, and in case of oversubscription, allocation shall be made in relation to the total number of new shares allotted through exercise of subscription rights, and to the extent that this is not possible, by drawing of lots. Secondly, allocation shall be made to other persons who have applied for subscription without subscription rights, and in the case of oversubscription, pro rata to the number of new shares subscribed for in the application form, and to the extent that this is not possible, by drawing of lots. Thirdly, allotment of the remaining new shares shall be made to the investors who have provided guarantees and in accordance with the conditions of their respective guarantee.

Change of share capital and number of shares as well as dilution

Through the Rights Issue, the number of shares in ExpreS²ion will increase by a maximum of 5,841,273 shares, from 31,153,456 shares to 36,994,729 shares and the share capital will increase by a maximum of SEK 649,030, from SEK 3,461,495 to SEK 4,110,525. This means that existing shareholders who choose not to participate in the Rights Issue will, if fully subscribed, experience a dilution corresponding to approximately 15.8 percent of the total number of shares and votes in the Company following the Rights Issue.

Subscription- and guarantee undertakings

Subscription undertakings of approximately SEK 1.8 million, corresponding to approximately 2.5 percent of the Rights Issue have been provided by existing shareholders, and guarantee commitments of approximately SEK 71.2 million, corresponding to approximately 97.5 percent of the Rights Issue. Thereby the Rights Issue is fully guaranteed. The subscription and guarantee undertakings have not been secured by means of bank guarantees, blocked funds, pledging of collateral or any similar arrangement. Further information regarding the parties who have entered into guarantee undertakings will be included in the prospectus that is expected to be published on or around 13 April 2022 in accordance with the timetable presented below.

Premilinary timetable for the Rights Issue

Publication of the Q1 2022 report

Due to the Rights Issue, the interim report for the period 1 January - 31 March 2022 will be published on 31 May 2022.

Lock-up undertakings

In connection with the Rights Issue, all members of the Company's board of directors and senior management with shareholdings in ExpreS²ion have undertaken towards Vator Securities AB, subject to customary exceptions, not to sell or otherwise transfer their shares without first, in each separate case, ascertain a written approval from Vator Securities AB. The decision to leave such written approval is decided by Vator Securities AB and the decision is made in each separate case. Agreed approval can depend on both individual and business-related situations. The lock-up period lasts for a period of 90 days following the publication of the outcome of the Rights Issue.

Prospectus

Full terms and conditions and instructions for the Rights Issue, as well as other information about the Company and information about subscription commitments, guarantee commitments and lock-up undertakings will be presented in the prospectus that the Company is expected to publish on or around 13 April 2022, available on ExpreS²ion’s website (www.expres2ionbio.com). The prospectus will be passported to Denmark and thus also available for Danish investors.

Advisors

Vator Securities act as financial advisor and issuing agent to the Company in connection with the Rights Issue. Baker Mckenzie is the Company’s legal advisor in connection with the Rights Issue.

Certified Adviser
Svensk Kapitalmarknadsgranskning AB
Telefon: +46 11 32 30 732
E-post: ca@skmg.se

This press release constitutes inside information that ExpreS2ion Biotech Holding AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014. The information was sent for publication, through the agency of the contact persons set out above, at the time stated by the Company’s news distributor, Cision, at the publication of this press release.

For further information about ExpreS²ion Biotech Holding AB, please contact:

Bent U. Frandsen, CEO
Telephone: +45 4256 6869
E-mail: buf@expres2ionbio.com

Keith Alexander, CFO
Telephone: +45 5131 8147
E-mail: ka@expres2ionbio.com 

About ExpreS²ion

ExpreS²ion Biotechnologies ApS is a fully owned Danish subsidiary of ExpreS²ion Biotech Holding AB with company register number 559033-3729. ExpreS²ion has developed a unique technology platform, ExpreS², for fast and efficient non-clinical development and production of complex proteins for new vaccines and diagnostics. ExpreS² is regulatorily validated for clinical supply. The platform includes functionally modified glycosylation variants for enhanced immunogenicity and pharmacokinetics. Since 2010, the Company has produced more than 500 proteins and virus-like particles (VLPs) in collaboration with leading research institutions and companies. ExpreS²ion develops novel VLP based vaccines in association with AdaptVac ApS, of which ExpreS²ion owns 34%. For additional information, please visit www.expres2ionbio.com.

IMPORTANT INFORMATION

The release, announcement or 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 follow such restrictions. The recipient of this press release is responsible for using this press release, and the information contained herein, in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer, or a solicitation of any offer, to buy or subscribe for any securities in ExpreS2ion in any jurisdiction, neither from ExpreS2ion nor from someone else.

This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Company. The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. Vator Securities is acting for ExpreS2ion in connection with the Rights Issue and no one else and will not be responsible to anyone other than ExpreS2ion for providing the protections afforded to its clients nor for giving advice in relation to the Rights Issue or any other matter referred to herein.

This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public Rights Issue of the securities in the United States. The information in this press release may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, within or into the Unites States, Australia, Canada, Hong Kong, Japan, New Zeeland, Singapore, South Africa or in any other jurisdiction where such announcement, publication or distribution of the information would not comply with applicable laws and regulations or where such actions are subject to legal restrictions or would require additional registration or other measures than what is required under Swedish law. Actions taken in violation of this instruction may constitute a crime against applicable securities laws and regulations.

This press release is not a prospectus for the purposes of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (the “Prospectus Regulation”) and has not been approved by any regulatory authority in any jurisdiction. A prospectus, corresponding to an EU Growth Prospectus regarding the Rights Issue described in this press release will be prepared and published by the Company. The prospectus will be scrutinized and approved by the Swedish Financial Supervisory Authority (Sw. Finansinspektionen) being the national competent authority and be published and available on the Company's website thereafter. Furthermore, the prospectus will be passported to Denmark making it available for Danish investors.

In the United Kingdom, this document and any other materials in relation to the securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this document relates is available only to, and will be engaged in only with, “qualified investors” who are (i) persons having professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). In the United Kingdom, any investment or investment activity to which this communication relates is available only to, and will be engaged in only with, relevant persons. Persons who are not relevant persons should not take any action on the basis of this press release and should not act or rely on it.

Forward-looking statements

This press release contains forward-looking statements that reflect the Company's intentions, beliefs, or current expectations about and targets for the Company's and the group's future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the Company and the group operates. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "intend", "may", "plan", "estimate", "will", "should", "could", "aim" or "might", or, in each case, their negative, or similar expressions. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. 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 Company does not guarantee that the assumptions underlying the forward-looking statements in this press release are free from errors and readers of this press release should not place undue reliance on the forward-looking statements in this press release. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of its date and are subject to change without notice. Neither the Company nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release, unless it is not required by law or Nasdaq First North Growth Market rule book for issuers.

Information to distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the “MiFID II Product Governance Requirements”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the shares in ExpreS2ion have been subject to a product approval process, which has determined that such shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the “Target Market Assessment”). Notwithstanding the Target Market Assessment, Distributors should note that: the price of the shares in ExpreS2ion may decline and investors could lose all or part of their investment; the shares in ExpreS2ion offer no guaranteed income and no capital protection; and an investment in the shares in ExpreS2ion is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Rights Issue.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the shares in ExpreS2ion.

Each distributor is responsible for undertaking its own target market assessment in respect of the shares in ExpreS2ion and determining appropriate distribution channels.