Medivir announces a partially guaranteed rights issue of approximately SEK 148 million

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INSIDE INFORMATION The Board of Directors of Medivir AB (publ) (“Medivir” or the “Company”), (NASDAQ Stockholm: MVIR) today resolved, subject to the approval by the extra general meeting, to carry out a new issue of shares with preferential rights for existing shareholders of approximately SEK 148 million (the “Rights Issue”). An extraordinary general meeting (the “EGM”) is proposed to approve the Board of Directors’ resolution on the Rights Issue. The EGM is set to be held on 1 December 2023 and the notice will be announced through a separate press release. The purpose of the Rights Issue is primarily to finance the continued follow-up in the phase 1b/2 fostrox study, the acceleration of preparations for the pivotal Lenvima + fostrox study in different geographies, and CMC readiness, besides general corporate purposes. The Company has received subscription undertakings and intentions from existing shareholders as well as members of the Board of Directors and management for approximately 21.7 percent of the Rights Issue, corresponding to approximately SEK 32 million. Moreover, the Company has received guarantee commitments from external investors of approximately SEK  68 million, corresponding to approximately 45.9 percent of the Rights Issue. Thus, the Company has received subscription undertakings and intentions as well as guarantee commitments for approximately 67.6 percent of the Rights Issue, corresponding to SEK 100 million.

Summary

• The Board of Directors in Medivir today resolved, subject to the approval by the EGM, to carry out the Rights Issue. The EGM is proposed to approve the Board of Directors’ resolution on the Rights Issue. The EGM is set to be held on 1 December 2023 and the notice will be announced through a separate press release.
• Shareholders of ordinary shares in Medivir have the preferential rights to subscribe for one (1) new share per every one (1) existing share, i.e. a subscription ratio of 1:1.
• The subscription price is SEK 2.65 per share, corresponding to a discount of approximately 46.6 percent, compared to the theoretical ex-rights price (TERP) based on the closing price of Medivir’s share on Nasdaq Stockholm on 7 November 2023, the last trading day before announcement of the Rights Issue.
• Upon full subscription of the Rights Issue, Medivir will receive approximately SEK 148 million before deductions of costs related to the Rights Issue.
• The subscription period in the Rights Issue is expected to run from 7 December 2023, up to and including 21 December 2023.
• Existing shareholder Linc AB has undertaken to subscribe for shares corresponding to its pro-rata share of the outcome of the Rights Issue. Existing shareholders Nordea Småbolagsfond Norden and HealthInvest Partners have expressed their intention to subscribe for shares pro-rata in the Rights Issue. In total, this represents approximately 20.5 percent of the Rights Issue or approximately SEK 30.3 million.
• Members of the Company’s Board of Directors and management, including CEO Jens Lindberg and Chairman of the Board Uli Hacksell, have undertaken, or expressed their intention, to subscribe for approximately 1.2 percent of the Rights Issue corresponding to approximately SEK 1.8 million.
• A number of investors have undertaken to guarantee approximately 45.9 percent of the Rights Issue, corresponding to approximately SEK 68 million, at an underwriting commission of ten (10) percent of the guaranteed amount in cash.
• The Company has received subscription undertakings and intentions as well as guarantee commitments for approximately 67.6 percent of the Rights Issue, corresponding to SEK 100 million.
• Existing shareholders, representing approximately 20.3 percent of the total votes in the Company, have undertaken or expressed their intention to vote in favor of the approval of the Board of Director’s resolution to carry out the Rights Issue at the EGM.
• The Company intends to hold a conference call on 8 November 2023 at 14:00 CET.

Medivir’s CEO Jens Lindberg comments: “We continue to see very promising signs of clinical benefit with fostrox in combination with Lenvima as new data shows increased benefit when fostrox is added to Lenvima in 2nd line primary liver cancer (HCC). This is a patient group for whom there are no approved treatments today and the unmet medical need is significant. The latest data has strengthened our conviction of the future role for fostrox in HCC and the potential to become the first approved treatment in a market estimated at approximately USD 2.5bn by 2028. The Rights Issue allows us to initiate preparations for the next steps of clinical development of fostrox, and I would like to extend my gratitude to existing and new investors for their trust.”

Background and motive

Medivir is a pharmaceutical company focusing on the development of innovative treatments for cancer in areas of high unmet medical need. The Company’s lead asset, fostroxacitabine bralpamide (fostrox), is developed as an orally administered prodrug against hepatocellular carcinoma (HCC), the most common form of liver cancer, and the fifth most common cancer type worldwide. Fostrox received orphan drug designation by the FDA and EMA, and it is currently investigated in a fully recruited phase Ib/IIa trial as a second line (2L) treatment in HCC in combination with Lenvima. As of October 2023, in the fully enrolled study, interim efficacy data from 18 of the 21 patients with at least 12 weeks of follow-up have shown extended median time to progression and improved overall response rate of 22 percent compared to previously presented interim data, as well as a continued good safety and tolerability profile. The clinical benefit is promising as patients remain longer on treatment than expected, and compared with historical benchmarks, as more than 50 percent of patients are still on treatment in the ongoing study. The Company intends to provide further data updates about the phase Ib/IIa trial in Q1 2024. In addition, in 2024, Medivir intends to start a pivotal phase IIb study in patients with HCC using the combination of fostrox and Lenvima as a 2L treatment, with the aim to seek an accelerated approval by the FDA by 2027. Medivir’s pipeline includes marketed and outlicensed projects, such as birinapant, a SMAC mimetic exclusively outlicensed to IGM Biosciences, as well as other compounds, such as Remetinostat and MIV-711, in various stages of development.

Medivir intends to host a teleconference on 8 November 2023 at 14:00 CET.

Participation via teleconference is possible using the link. https://conference.financialhearings.com/teleconference/?id=5003553

After registration, participants are provided phone numbers and a conference ID to access the conference. Via teleconference, participants will be able to ask questions verbally.

Participation via webcast is possible using the link. https://ir.financialhearings.com/press-conference-nov-2023 

Use of proceeds

Upon full subscription in the Rights Issue, the Company will receive approximately SEK 148 million before deduction of costs attributable with the Rights Issue. The Company has received subscription undertakings, intentions, and guarantee commitments for approximately 67.6 percent of the Rights Issue, corresponding to SEK 100 million. Thus, the Company will receive at least SEK 100 million in gross proceeds from the Rights Issue, before deductions of costs attributable to the Rights Issue, that will be used for the following purposes, listed in order of priority below (approximate share of the net proceeds stated in parentheses).

(i)         Continued follow-up in the phase 1b/2 fostrox study with the ambition to generate more and longer-term compelling data (approximately 20 percent).

(ii)         Accelerate preparations for pivotal Lenvima + fostrox study, including finalized study design and regulatory interactions towards IND and fast-track designation (approximately 15 percent).

(iii)        Advance activities to ensure timely study initiation in different geographies, including USA and Japan, and CMC readiness (approximately 30 percent).

(iv)        Advance partnering discussions in Asia (approximately 10 percent).

(v)         General corporate purposes and extension of the Company’s cash runway to H1 2025 (approximately 25 percent).

Terms of the Rights Issue

Shareholders of ordinary shares who are registered in the share register in Medivir on the record date of the Rights Issue, i.e. 5 December 2023, will receive one (1) subscription right for every one (1) share held in the Company. The subscription rights entitle the holder to subscribe for new shares with preferential rights, whereby one (1) subscription right entitles the shareholder to subscribe for one (1) new share. In addition, investors are offered the possibility to subscribe for shares without subscription rights.

The board of directors of the company shall resolve on allocation of shares in accordance with the following order: (i) firstly allocation shall be made to those who have subscribed for shares with subscription rights, regardless of whether they were shareholders on the record date or not; (ii) secondly allocation shall be made to those who have subscribed for shares without the support of subscription rights and in the event that allotment to these cannot be made in full, allotment shall be made pro rata in relation to the total number of shares that the subscriber has applied to subscribe for, and (iii) finally, in case the rights issue is not subscribed up to the underwritten amount, the guarantors that have entered into guarantee commitments shall subscribe for the outstanding number of shares, up to the underwritten amount and up to each guarantor's respective committed amount, and in the event that allotment to such guarantors cannot be made in full in relation to their respective committed amount, allotment of shares shall be made pro rata in relation to each guarantor's respective committed amount. To the extent that allotment at any stage according to the above cannot be made pro rata, allotment shall be made by drawing lots.

The subscription price is SEK 2.65 per new share, corresponding to a discount of approximately 46.6 percent to the theoretical ex-rights price (TERP), based on the closing price of Medivir’s share on Nasdaq Stockholm on 7 November, the last trading day before announcement of the Rights Issue. Provided that the Rights Issue is fully subscribed, Medivir will receive gross proceeds of approximately SEK 148 million before deduction of transaction costs.

Provided that the Rights Issue is fully subscribed, the number of shares in Medivir will increase by a maximum of 55,841,401 shares, from 56,706,151 shares to a maximum of 112,547,552 shares. The share capital will increase by a maximum of SEK 27,920,700.5, from SEK 28,353,075.5 to a maximum of SEK 56,273,776.0. Shareholders who choose not to participate in the Rights Issue will have their ownership diluted by up to 49.6 percent through the Rights Issue (based on the total maximum outstanding shares after the Rights Issue). These shareholders have the opportunity to compensate themselves financially for the dilution effect by selling their subscription rights received.

The complete terms and conditions of the Rights Issue and information about the Company will be presented in a prospectus, prepared in accordance with the simplified disclosure regime for secondary issuances, that is expected to be published on the Company's website on or around 6 December 2023.

EGM

The EGM is proposed to approve the Board of Directors’ resolution on the Rights Issue. The EGM is set to be held on 1 December 2023. Existing shareholders, representing approximately 20.3 percent of the total votes in the Company, have undertaken or expressed their intention to vote in favor of the authorization at the EGM.

The notice for the EGM will be published through a separate press release and will be available on the Company's website, www.medivir.com.

Intentions to subscribe for shares, subscription undertakings and guarantee commitments

Existing shareholder Linc AB has undertaken to subscribe for shares corresponding to its pro-rata share of the outcome of the Rights Issue. Existing shareholders Nordea Småbolagsfond Norden and HealthInvest Partners have expressed their intention to subscribe for shares pro-rata in the Rights Issue. In total, this represents approximately 20.5 percent of the Rights Issue or approximately SEK 30.3 million. In addition, members of the Company’s Board of Directors and management, including CEO Jens Lindberg, and Chairman of the Board Uli Hacksell have undertaken, or expressed their intention, to subscribe for shares representing approximately 1.2 percent of the Rights Issue corresponding to approximately SEK 1.8 million. In total, these subscription undertakings and intentions represent approximately 21.7 percent of the Rights Issue corresponding to approximately SEK 32 million.

A number of investors have undertaken to guarantee approximately 45.9 percent of the Rights Issue, corresponding to approximately SEK 68 million, at an underwriting commission of ten (10) percent of the guaranteed amount in cash.

The Company has received subscription undertakings, intentions and guarantee commitments up to approximately 67.6 percent of the Rights Issue, corresponding to SEK 100 million.

Further information regarding the parties who have entered into subscription undertakings and guarantee commitments will be presented in the prospectus to be made public before the commencement of the subscription period.

Lock-up undertakings

Prior to the announcement of the Rights Issue, members of the Board of Director's and shareholding members of Senior Management of the Company have entered into lock-up undertakings, which, among other things and with customary exceptions, mean that they have undertaken not to sell shares in the Company. The lock-up undertakings expire on the day that falls 180 days after the announcement date of the outcome in the Rights Issue.

Furthermore, the Company has undertaken towards Pareto Securities AB and Zonda Partners AB, subject to customary exceptions, not to issue additional shares or other share-related instruments for a period of 90 days after the end of the subscription period.

Preliminary time table of the Rights Issue

The below timetable for the Rights Issue is preliminary and may be adjusted.

Advisors

Pareto Securities and Zonda Partners have been appointed as Joint Bookrunners. Advokatfirman Lindahl KB is acting as legal adviser to the Company. Baker & McKenzie Advokatbyrå KB is acting as legal adviser to the Joint Bookrunners in connection with the Rights Issue. Nordic Issuing acts as issuing agent in connection with the Rights Issue.

For more information, please contact:

Jens Lindberg

Chief Executive Officer

Medivir AB

M: +46 72 531 11 17

Email: jens.lindberg@medivir.com

Magnus Christensen

Chief Financial Officer

Medivir AB

M: +46 73 125 06 20

Email: Magnus.Christensen@medivir.com

This press release constitutes inside information that Medivir AB 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 set out above at the publication of this press release.

About Medivir

Medivir develops innovative drugs with a focus on cancer where the unmet medical needs are high. The drug candidates are directed toward indication areas where available therapies are limited or missing and there are great opportunities to offer significant improvements to patients. Medivir is focusing on the development of fostroxacitabine bralpamide (fostrox), a pro-drug designed to selectively treat liver cancer and to minimize side effects. Collaborations and partnerships are important parts of Medivir’s business model, and the drug development is conducted either by Medivir or in partnership. Birinapant, a SMAC mimetic, is exclusively outlicensed to IGM Biosciences (Nasdaq: IGMS) to be developed in combination with IGM-antibodies for the treatment of solid tumors. Medivir’s share (ticker: MVIR) is listed on Nasdaq Stockholm’s Small Cap list. www.medivir.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 legal 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 Medivir in any jurisdiction, neither from Medivir nor from someone else.

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, prepared in accordance with the simplified disclosure regime for secondary issuances as set forth in the Prospectus Regulation, regarding the Rights Issue described in this press release will be prepared and published by the Company prior to the commencing of the subscription period.

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 relating to the Rights Issue 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. Pareto Securities and Zonda Partners are acting for Medivir in connection with the Rights Issue and no one else and will not be responsible to anyone other than Medivir 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. Pareto Securities and Zonda Partners are not liable to anyone else for providing the protection provided to their customers or for providing advice in connection with the Rights Issue or anything else mentioned 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 USA, Australia, Belarus, Canada, Hong Kong, Japan, New Zeeland, Russia, Singapore, South Africa, South Korea, Switzerland 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.

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 Stockholm's 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 offered shares 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 the Company may decline and investors could lose all or part of their investment; the shares in the Company offer no guaranteed income and no capital protection; and an investment in the shares in the Company 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 the Company.

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

The English text is an unofficial translation of the original Swedish text. In case of any discrepancies between the Swedish text and the English translation, the Swedish text shall prevail.

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