The Board of Directors of NextCell Pharma intends on resolving on a fully guaranteed preferential rights issue of approximately SEK 150 million

The Board of Directors of NextCell Pharma AB (“NextCell” or the “Company”) today announces its intention to resolve on a fully guaranteed rights issue of up to approximately SEK 150 million with preferential rights for the Company’s existing shareholders (the “Rights Issue”). The Board of Directors’ intent to resolve on the Rights Issue requires that the shareholders at the Annual General Meeting on 24 November 2020 authorizes the Board of Directors to resolve on share issues. In the notice convening the Annual General Meeting, which was published by press release on 23 October 2020, the Board of Directors proposed a resolution on authorization to resolve on share issues. Due to the Rights Issue, the Board of Directors intends to limit its proposal on authorization prior to the Annual General Meeting. The Company's largest shareholder Diamyd Medical AB has undertaken to subscribe for its pro rata share in the Rights Issue, amounting to approximately SEK 19 million. Furthermore, parts of the Company’s Board of Directors and senior executives have entered into subscriptions undertakings amounting to approximately SEK 5.3 million. In total, the Rights Issue is covered by subscription undertakings to approximately 45 per cent and guarantee commitments to approximately 55 per cent.

Summary

• The Board of Directors of the Company today announces its intention to resolve on the Rights Issue, provided that the shareholders at the Annual General Meeting on 24 November 2020 authorizes the Board of Directors to resolve on share issues. The Board of Directors intends to limit its proposal for resolution on authorization to resolve on new issues of shares prior the Annual General Meeting is held.
• The rights issue will, if fully subscribed, provide the Company with approximately SEK 150 million before issue costs.
• The net proceeds will, among other things, be used to finance the clinical phase-III trial ProTrans-3, preparatory work for the application of market approval of ProTrans™, the Company's day-to-day operations, and the development of ProTrans™ for new indications.
• Under the preliminary terms of the Rights Issue, all existing shareholders receive three (3) subscription rights for each one (1) share held on the record date, which is expected to be 3 December 2020. Seven (7) subscription rights entitle the holder to subscribe for one (1) new share at a subscription price of SEK 15.0 per share.
• The subscription period for subscription of shares runs from 7 December 2020 until to and including 21 December 2020.
• The rights issue is covered by approximately 45 per cent of subscription undertaking and approximately 55 per cent of guarantee commitments and is thus fully guaranteed. No compensation is paid for provided subscription undertakings and compensation of 8 per cent of the guaranteed amount is paid for provided guarantee commitments.
• The Company's largest owner Diamyd Medical AB has undertaken to subscribe for its pro rata share in the Rights Issue.

"I am very proud to be able to announce such a strong commitment and interest from both existing owners and new investors," says Mathias Svahn, CEO of NextCell.

Background and reasons in brief

NextCell is a cell therapy company that has recently finished phase II with its leading drug candidate, ProTrans™, a treatment for type 1 diabetes. In the Company's clinical trials, ProTrans™ has demonstrated both safety and efficacy regarding the patient's own preservation of insulin production. Based on the Company's innovative selection algorithm, advanced cell therapies are evaluated for autoimmune diseases, inflammatory conditions and to counteract transplant rejection. In September 2020, positive results were announced in the company's clinical phase II trial, ProTrans-2. The study demonstrated that the patients treated with a dose of ProTrans™ had maintained a statistically significantly higher insulin production after a 12-month period compared to patients treated with placebo and thus the study reached its primary efficacy target. Based on these successful results in Phase II, NextCell intends to take ProTrans™ to market approval via a Phase III study, ProTrans-3. The company has initated preperations for submitting an application to carry out such trials.

To enable phase-III trials in type 1 diabetes, the Company needs to capitalize further. In order to create the conditions for this, the Board of Directors of NextCell intends to carry out a Rights Issue of a total of approximately SEK 150 million, provided that the shareholders at the Annual General Meeting on 24 November 2020 authorizes the Board of Directors to resolve on the Rights Issue.

In the event that the Rights Issue is carried out and fully subscribed, the Company receives SEK 150 million before transaction-related costs, which are expected to amount to approximately SEK 15,5 million. The net proceeds from the Rights Issue thus amounts to SEK 134,5 million. The Company intends to mainly use the net proceeds from the Rights Issue in the way presented in the below order of priority:

• Approximately 60 per cent of the net proceeds will be used to finance the clinical phase III trial ProTrans-3 and the preparatory work for the application of market approval of ProTrans™.
• Approximately 30 per cent of the net proceeds will be used to finance the Company’s day-to-day operations.
• Approximately 10 per cent of the net proceeds will be used for other research and development of ProTrans™ in diabetes and for the development of ProTrans™ for new indications.

Prospectus

Subject to the Annual General Meeting on 24 November 2020 authorizing the Board of Directors to resolve on share issues and that the Board of Directors resolves on the Rights Issue, the Company will draft an EU Growth prospectus which will be published once the Swedish Financial Supervisory Authority has reviewed and approved the prospectus, which is expected to take place around 3 December 2020.

Authorization to resolve on share issues and terms and conditions for the Rights Issue

Subject to the Annual General Meeting on 24 November 2020 authorizing the Board of Directors to resolve on rights issues the Rights Issue is expected to take place around 7 December to 21 December 2020. According to the preliminary terms and conditions of the Rights Issue, all existing shareholders receive three (3) subscription rights for each one (1) share held on the record date, which is expected to take place around 3 December 2020. Seven (7) subscription rights entitle the holder to subscribe for one (1) new share in the Rights Issue at a subscription price of SEK 15 per share. Trading in subscription rights is expected to take place from 7 December until and including 17 December 2020. An updated limited proposal for resolution on authorization to resolve on rights issues will be published before the Annual General Meeting is held in a separate press release and the final terms and conditions of the Rights Issue will be published when the Board of Directors resolves on the Rights Issue.

Subscription undertakings, guarantee commitments and lock-up

The Rights Issue compromises of subscription undertakings corresponding to approximately 45 per cent of the Rights Issue, and guarantee commitments corresponding to approximately 55 per cent of the Rights Issue. Among those who have submitted subscription undertakings are the Company's largest shareholder Diamyd Medical AB, who has undertaken to subscribe for its pro rata share in the Rights Issue amounting to approximately SEK 19 million. Furthermore, parts of the Company’s Board of Directors and senior executives have undertaken subscriptions undertakings amounting to approximately SEK 5.3 million. Neither subscription undertakings nor guarantee commitments are secured by bank guarantee, blocked funds, pledges or similar arrangements. The guarantee commitments are subject to a guarantee commission paid in cash and amounting to eight (8) per cent of the guaranteed amount. No compensation is paid for provided subscription undertakings. All board members and senior executives holding shares in NextCell as well as the Company's largest shareholder Diamyd Medical AB, intend to enter into so-called lock-up arrangements before the Rights Issue, by undertaking, with customary reservations, not to sell their respective shares or otherwise enter into transactions with a similar effect, during 180 days from the announcement of the outcome of the Rights Issue. Further information on the parties that have entered into guarantee commitments will be disclosed in the EU Growth prospectus which will be published by the Company in connection with the rights issue.

Preliminary time table

Advisors

Vator Securities AB is financial adviser, and Eversheds Sutherland Advokatbyrå AB is legal adviser to NextCell in connection with the Rights Issue. Avanza Bank AB is issuing agent in connection with the Rights Issue.

This information is the information that NextCell Pharma AB is required to disclose under the EU Market Abuse Regulation. The information was provided by the below contact person for publication on 20 November 2020 at 08:30 CET.

Important information

The information in this press release does not constitute an offer to acquire, subscribe or otherwise trade in shares, subscription rights or other securities in NextCell. No action has been taken and measures will not be taken to allow an offer to the public in any jurisdiction other than Sweden. The invitation to interested persons to subscribe for shares in NextCell will only be made through the Prospectus, which the Company intends on publishing around 3 December 2020.

Neither subscription rights, paid subscribed shares ("BTA") nor newly issued shares have been recommended or approved by any US federal or state securities authority or regulatory authority. No subscription rights, BTAs or newly issued shares have been registered or will be registered under the United States Securities Act of 1933 in its current wording, or under any other applicable law in the United States, Australia, Hong Kong, Japan, Canada, New Zealand, Switzerland, Singapore, South Africa or in any other country where the Rights Issue or Private Placement or distribution of the press release is contrary to applicable laws or regulations or requires that further prospectuses be prepared, registered or that any other measure is taken in addition to what is required by Swedish law. Accordingly, the press release, as well as the prospectus, application form and other documents attributable to the Rights Issue and Private Placement, may not be distributed to or within any such jurisdiction.

This announcement may include forward-looking statements, which are based on NextCels’ current expectations and projections about future events and financial and operational development. Words such as “intends”, “will”, “expects”, “anticipates”, “may”, “plans”, “estimates”, and other expressions that imply indications or predictions of future developments or trends, constitute forward-looking information. Forward-looking information is inherently associated with both known and unknown risks and uncertainties as it depends on future events and circumstances. Forward-looking information does not constitute a guarantee of future performance or development and actual results may differ materially from what is expressed in forward-looking information.

This information, the opinions, and forward-looking statements contained in this announcement, are applies only at this date and are subject to change without notice. NextCell makes no commitments to disclose updates or revisions to forward-looking information, future events or similar circumstances, other than as required by applicable law.

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For more information about NextCell Pharma AB, please contact:

Mathias Svahn, CEO

Sofia Fredrikson, CFO

Phone: 08-735 5595

E-mail: info@nextcellpharma.com

Website:

www.nextcellpharma.com, www.cellaviva.se

www.cellaviva.se

www.cellaviva.dk

About NextCell Pharma AB

NextCell is a Phase II cell therapy company with the lead candidate ProTrans™, for the treatment of type-1 diabetes. Focus is to take ProTrans™ to market approval via a phase III study. Furthermore, NextCell operates Cellaviva, Scandinavia's largest stem cell bank for family-saving of stem cells from umbilical cord blood and umbilical cord tissue with permission from IVO.

FNCA Sweden AB is assigned as Certified Adviser, 08-528 00 399, info@fnca.se.