The Board of Directors in Intervacc has resolved on a fully covered rights issue of approximately SEK 104 million

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Stockholm, May 11, 2023

The Board of Directors of Intervacc AB (publ) (“Intervacc” or the ”Company”) announced on April 19, 2023, its intention to resolve on a fully covered rights issue of approximately SEK 100 million. The Board of Directors of Intervacc has today, with the support of the authorisation from the extraordinary general meeting held on May 5, 2023, resolved on a new issue of shares of a maximum of approximately SEK 104 million, with preferential rights for the Company’s existing shareholders (the “Rights Issue”). The Rights Issue is fully covered by subscription undertakings, guarantee commitments and declaration of intentions to subscribe for shares from existing shareholders and new investors, including among others Handelsbanken Fonder, Swedbank Robur, Fjärde AP-fonden, Aktie-Ansvar Sverige and Aktia Asset Management, and members of the Board of Directors and executive management.

Summary

• The purpose of the Rights Issue is to finance accelerated commercialization of Strangvac, regulatory processes for Strangvac in the US, Australia and New Zealand with the aim of obtaining marketing authorisation, as well as continued development of product candidates in the Company’s project pipeline (INV274 and INV412).
• For each existing share held on the record date, one (1) subscription right is received. The subscription rights entitle the holder to subscribe for new shares with preferential rights, whereby two (2) subscription rights gives the right to subscribe for one (1) new share.
• The subscription price has been set at SEK 4.10 per share which, assuming that the Rights Issue is fully subscribed, amounts to proceeds of approximately SEK 104 million, before the deduction of costs related to the transaction, which are estimated at approximately SEK 12 million.[1]
• The Rights Issue is fully covered through a combination of subscription undertakings, declarations of intention to subscribe for shares, and guarantee commitments.
  • Certain existing shareholders, among others Fjärde AP-fonden, Aktia Asset Management and Aktie-Ansvar Sverige, members of the Board of Directors and executive management have undertaken to subscribe for shares in the Rights Issue for a total of approximately SEK 15 million, equivalent to approximately 14 per cent of the Rights Issue. In addition to members of the Board of Directors and executive management who intend to participate with at least their respective pro rata shares of the Rights Issue, all other members of the Board of Directors and executive management who own shares have committed to subscribe for a number of shares corresponding to at least their proceeds from any subscription rights sold;
  • Certain existing shareholders, among others Handelsbanken Fonder and Swedbank Robur, have declared their intention to subscribe for shares in the Rights Issue for a total of approximately SEK 15 million, equivalent to approximately 14 per cent of the Rights Issue.
  • External guarantors have provided guarantee commitments subject to customary conditions which, in aggregate, amount to approximately SEK 74 million, equivalent to approximately 71 per cent of the Rights Issue.
• The record date for participation in the Rights Issue with preferential rights is May 19, 2023. Last day of trading in Intervacc’s shares including right to receive subscription rights in the Rights Issue is May 16, 2023 and the first day of trading in the Company’s shares without receiving subscription rights in the Rights Issue is May 17, 2023.
• The subscription period in the Rights Issue will run from May 23, 2023 to June 7, 2023.
• Trading in subscription rights will take place on the Nasdaq First North Growth Market during the period from May 23, 2023 to June 1, 2023.
• Through the Rights Issue, a maximum of 25,245,421 new shares may be issued.

Background and reasons

Intervacc develops and sells modern veterinary vaccines based on recombinant fusion proteins. The Company's main focus is to develop vaccines against infectious diseases caused by gram-positive bacteria, where the Company believes it is particularly strong in developing vaccines against streptococcal and staphylococcal infections. Preventing diseases reduces the use of antibiotics and thus the risk of developing antibiotic-resistant bacteria. The company's first proprietary product, Strangvac, is a vaccine against the equine disease Strangles. In August 2021, the European Commission granted marketing authorisation for Strangvac in the EU. In the same month, the Norwegian Medicines Agency granted Strangvac a marketing authorization in Norway and in September 2021, the English Veterinary Medicines Directorate ("VMD") also granted a marketing authorisation for Strangvac in the UK. An exclusive distribution agreement was signed in April 2021 with Dechra Pharmaceuticals PLC ("Dechra"), to commercialise Strangvac in Europe, excluding the Nordic and Baltic markets where Intervacc retained the rights to sales and marketing. In 2022, Strangvac was gradually launched in Sweden, Denmark, the UK, Germany, France, the Netherlands, Belgium, Luxembourg, Austria, Ireland, Poland and Italy. In addition to Europe, the company has identified North America, Australia and New Zealand as primary markets for Strangvac. In February 2022, Intervacc submitted the Company's application for marketing authorisation for Strangvac in the United States to the United States Department of Agriculture ("USDA").

Based on the same technology platform, Intervacc is developing two product candidates: INV274, for a vaccine against Streptococcus suis infection in pigs, and INV412, for a vaccine against Staphylococcus aureus infection in dairy cows. These product candidates have both undergone safety and immunogenicity studies with positive results. In addition, on April 25, 2022, the Company announced that positive clinical results were obtained in a proof-of-concept study where piglets from vaccinated sows were protected against an experimental Streptococcus suis infection. A prototype vaccine against udder infection in dairy cows is currently undergoing a proof-of-concept study.

The company believes that the establishment and sale of a new vaccine for the private market usually follows an S-curve, with an initial introduction phase where sales increase slowly, an expansion phase where sales increase rapidly, and finally a maturity phase with slower growth when the product is close to being fully established in the market. Intervacc has started the commercialisation of Strangvac in 2022, and sales are still in the introduction phase. One of the cornerstones of the Company's market strategy is to create and develop the market for a vaccine against Strangles by spreading knowledge about how common, infectious and serious Strangles is for horses. The Company believes that the disease is severely under-reported in many European countries. It is also important to establish guidelines and recommendations for veterinarians and horse owners on how to use Strangvac and create confidence in using the vaccine to prevent Strangles. The aim is to make Strangvac part of the standard vaccination of horses. Strangvac is an important tool for all horse owners who want to prevent Strangles and protect their horses. Strangvac is also a very cost-effective way to protect businesses from the major medical and economic damage that a Strangles outbreak causes to stable owners, businesses with racehorses or riding schools. Intervacc works actively to raise awareness among horse owners and veterinarians about Strangvac, both directly and through the partner Dechra. Developing and then commercialising a vaccine is costly, which is why it is natural that the Company does not reach profitability before the Company has reached the expansion and maturity phases. In addition to continued development of the vaccine for pigs and cows, the Company is continuously investing in developing the processes for manufacturing and quality control. These activities aim to extend the shelf life of the vaccine and its components, increase the precision of analytical methods, reduce lead times and thereby reduce the risk of rejecting batches, and reduce the vaccine's manufacturing cost. In 2022, the Company has extended the shelf life of components in the vaccine from the initial 9-18 months at registration to 28 months for these components. In the long term, these investments lead to greatly improved profitability, but in the short term have had a negative impact on operating profit.

The reason for the Rights Issue is to obtain working capital to finance the Company's growth-oriented business plan. Intervacc's assessment is that the existing working capital is not sufficient to cover the Company's capital needs during the coming twelve-month period given the growth-oriented business plan. Considering the Company's planned activities and the growth-oriented business plan, a deficit of working capital is expected to arise in November 2023 and the deficit for the coming twelve-month period is estimated at approximately SEK 30 million. With this background, the Board of Directors has decided to carry out a Rights Issue to create opportunities for continued successful development in accordance with the Company's growth-oriented business plan and strategy. The purpose of the Rights Issue is to finance accelerated commercialisation of Strangvac, regulatory processes for Strangvac in the US, Australia and New Zealand in order to obtain market approval, and further development of product candidates in the Company's project portfolio (INV274 and INV412).

Use of proceeds

Since the Rights Issue is fully covered through a combination of subscription undertakings, declaration of intention to subscribe for shares and guarantee commitments, the Company will receive approximately SEK 104 million before deduction of issue costs, which are estimated to amount to SEK 12 million. Intervacc intends to use the net proceeds of approximately SEK 92 million, with the approximate percentage shares of the issue proceeds stated below, to finance the following purposes stated in order of priority:

• Accelerated commercialisation of Strangvac in primary markets through sales and marketing activities as well as optimisation and scale-up of production (approximately 70 percent)
• Completion of regulatory process for Strangvac in the US, and initiation of regulatory processes for Strangvac in Australia and New Zealand in order to obtain marketing authorisation (approximately 20 percent)
• Further development of the product candidates INV274, a vaccine against S. suis infection in pigs, and INV412, a vaccine against S. aureus infection in dairy cows (approximately 10 percent)

The Rights Issue

The Board of Directors has, with the support of the authorisation from the extraordinary general meeting on May 5, 2023, resolved to carry out an issue of a maximum 25,245,421 new shares with preferential rights for the Company’s shareholders, i.e. the Rights Issue as defined above. The subscription price is SEK 4.10 per new share.

Provided that the Rights Issue is fully subscribed, the Company will receive approximately SEK 104 million before deduction of costs related to the transaction, which are estimated at approximately SEK 12 million (primarily consisting of compensation for guarantee commitments, fees to advisors and costs for practical management). For information regarding use of estimated net proceeds, refer to the section Use of proceeds above. At full subscription the Company’s share capital will increase with approximately SEK 50,490,846, resulting in a dilution of approximately 33 per cent (calculated after the Rights Issue).

The shareholders of the Company will have preferential rights to subscribe for the new shares that are included in the Rights Issue. For each share held on the record date, May 19, 2023, one (1) subscription right will be received, and two (2) subscription rights will entitle to subscription for one (1) new share. Shares that are not subscribed for with the support of subscription rights are offered to Intervacc’s shareholders and other investors who apply to subscribe for shares without the support of subscription rights.

If not all of the new shares are subscribed for with subscription rights, the Board of Directors will, within the limit of the maximum amount of the Rights Issue, resolve on allotment of new shares subscribed for without subscription rights as follows:

• Firstly, to those who have subscribed for new shares with subscription rights, regardless of whether the subscriber was a shareholder on the record date of the Rights Issue or not, and in the case of oversubscription, pro rata in relation to the number of new shares subscribed for with subscription rights, and, to the extent that cannot be done, by lottery;
• secondly, allocation shall be done to those who have subscribed for new shares without subscription rights, and in the case of oversubscription, pro rata in relation to the number of new shares subscribed for in the application, and, to the extent that cannot be done, by lottery; and
• lastly, allocation shall be made to guarantors of the Rights Issue pro rata in relation to the guaranteed amount, and, to the extent that cannot be done, by lottery.

Shareholders who do not participate in the Rights Issue have an opportunity to receive economic compensation for the dilution by selling their subscription rights. In order not to lose the value of the subscription rights, the holder must either use these to subscribe for new shares within the subscription period or sell the subscription rights that are not to be exercised within the period for trading in subscription rights.

Subscription undertakings, declarations of intent to subscribe for shares and guarantee commitments

Certain existing shareholders, among others Fjärde AP-fonden, Aktia Asset Management and Aktie-Ansvar Sverige, members of the Board of Directors and executive management, have undertaken to subscribe for shares in the Rights Issue. Total subscription undertakings from these amount to approximately 14 per cent of the Rights Issue, which corresponds to approximately SEK 15 million. In addition to members of the Board of Directors and executive management who intend to participate with at least their respective pro rata shares of the Rights Issue, all other members of the Board of Directors and executive management who own shares have committed to subscribe for a number of shares corresponding to at least their proceeds from any subscription rights sold.

Certain existing shareholders, among others Handelsbanken Fonder and Swedbank Robur, have declared their intention to subscribe for shares in the Rights Issue, in an aggregate amount of SEK 15 million, corresponding to approximately 14 per cent of the Rights Issue.

In addition of the aforementioned subscription commitments and declaration of intentions, external guarantors have provided guarantee commitments subject to customary conditions, which in aggregate, amount to approximately SEK 74 million, corresponding to approximately 71 per cent of the Rights Issue.

The Rights Issue is thus fully covered through the subscription undertakings, declaration of intention to subscribe for shares, and guarantee commitments mentioned above.

For the guarantee commitments, a guarantee commission of 6.5 per cent of the guaranteed amount shall be paid as a cash remuneration. No remuneration shall be paid for the subscription undertakings or declarations of intention to subscribe for shares. Neither of these commitments are secured by bank guarantee, blocked funds, pledges or similar arrangements. Further information regarding the parties who have submitted subscription undertakings, declaration of intent to subscribe for shares and guarantee commitments will be stated in the prospectus published before the start of the subscription period.

The prospectus

Full terms and conditions for the Rights Issue and further information about the Company, net proceeds, guarantee commitments etc. will be disclosed in the EU Growth Prospectus which will be drawn up and published by the Company around May 22, 2023.

Preliminary timetable for the Rights Issue

May 16, 2023 Last day for trading including the right to receive subscription rights

May 17, 2023 First day of trading without the right to receive subscription rights

May 19, 2023 Record date for participation in the Rights Issue with preferential rights, that is, shareholders who are registered in the share register maintained by Euroclear Sweden AB as of this day will receive subscription rights that entitle to participation in the Rights Issue with preferential rights

May 22, 2023 Publication of EU Growth Prospectus

May 23 – June 1, 2023 Trading in subscription rights

May 23 – June 7, 2023 Subscription period

May 23 – June 13, 2023 Trading in paid subscribed shares (BTA)

June 9, 2023 Announcement of the outcome of the Rights Issue

June 14, 2023 The Rights Issue is registered with the SCRO

Advisors

In conjunction with the Rights Issue, the Company has engaged Carnegie Investment Bank AB (publ) as Sole Global Coordinator and Bookrunner, and Cirio Advokatbyrå AB as legal advisor.

For more information please contact:  

Andreas Andersson, CEO

Phone: +46 (0)8 120 10 601, Cell: +46 (0)73 335 99 70

E-mail: andreas.andersson@intervacc.se

This information is information that Intervacc AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 23.50 CEST on May 11, 2023.

About Intervacc

Intervacc AB is a Swedish company within animal health developing vaccines for animals. The Company’s vaccine and vaccine candidates are based on several years of research at Karolinska Institutet and Swedish University of Agricultural Research where the foundation was laid for the Company´s research and development work. The Intervacc share has been listed on the Nasdaq First North Growth Market since April 2017 with Eminova Fondkommission AB as Certified Adviser.

Contact information for Certified Adviser

Eminova Fondkommission AB

E-mail: adviser@eminova.se, Phone: +46 (0)8 – 684 211 10

Important information

The information in this press release does not constitute an offer to acquire, subscribe for or otherwise trade with shares, paid subscribed share, subscription rights or other securities in the Company. No action has been taken, nor will any actions be taken, to permit an offer to the public in any other jurisdiction than Sweden. An invitation to eligible persons to subscribe for shares in the Company will only be made through the prospectus that the Company is expected to publish in an authorised manner.

The information in this press release may not be published or distributed, directly or indirectly, within or into the United States of America (including its territories and possessions, any state of the United States and the District of Columbia, the “USA”), Australia, Belarus, Hong Kong, Japan,  Canada, New Zealand, Russia, Switzerland, Singapore, South Africa or any jurisdiction where doing so might be unlawful, subject to legal restrictions or require other actions than the ones prescribed under Swedish law. Actions in violation of these instructions may constitute a breach of applicable securities law. This press release does not constitute an offer of invitation to acquire or subscribe for shares or other securities in the USA. No shares, paid subscribed share, subscription rights or other securities issued by the Company (the “Securities”) have been, nor will they be, registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or the securities laws in any other state or jurisdiction in the USA and no Securities may be offered, subscribed, used, pledged, sold, retailed, delivered or transferred, directly or indirectly, in or into the USA other than pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the USA. The Securities have not been and will not be approved or registered by the Securities and Exchange Commission, any state securities authority or other authority in the USA. No such authority has assessed or made any statements about the Rights Issue or the accuracy or reliability of the prospectus. To assert the contrary is a criminal act in the USA.

This press release is not a prospectus for the purposes of Regulation (EU) 2017/1129 (the “Prospectus Regulation”) and has not been approved by any regulatory authority in any jurisdiction. In any EEA Member State, other than Sweden, this communication is only addressed to and is only directed at “qualified investors” in that Member State within the meaning of the Prospectus Regulation.

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” (within the meaning of the United Kingdom version of the Prospectus Regulation which is part of United Kingdom law by virtue of the European Union (Withdrawal) Act 2018) 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”); (ii) high net worth entities etc. falling within Article 49(2)(a) to (d) of the Order; or (iii) such other persons to whom such investment or investment activity may lawfully be made available under 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.

This press release contains forward-looking statements that reflect the Company’s intentions, beliefs, or current expectations about and targets for the Company’s future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the Company 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 nor does it accept any responsibility for the future accuracy of the opinions expressed in this press release or any obligation to update or revise the statements in this press release to reflect subsequent events. Undue reliance should not be placed on the forward-looking statements in this press release. The information, opinions and forward-looking statements contained in this press release speak only as at its date and are subject to change without notice. The Company does not undertake any obligation 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.