• news.cision.com/
  • SynAct/
  • SynAct resolves on a fully guaranteed rights issue of approximately SEK 150 million
English

SynAct resolves on a fully guaranteed rights issue of approximately SEK 150 million

Report this content

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

The Board of Directors of SynAct Pharma AB (”SynAct” or the “Company”) has today, pursuant to the authorization granted by the annual general meeting on 21 May 2021, resolved to carry out a new issue of shares with preferential rights for existing shareholders of approximately SEK 150 million before issue costs, guaranteed to 100 percent (the “Rights Issue”). In addition, the Board of Directors may, based on the authorization granted by the annual general meeting on 21 May 2021, resolve on an over-allotment option of up to approximately SEK 25 million (the “Over-allotment Option”), conditional upon the Rights Issue being oversubscribed. The proceeds from the Rights Issue will be used for conducting additional clinical phase 2 development with AP1189 in rheumatoid arthritis (RA), continue development of AP1189 for kidney disease in a re-designed study set-up, other research and development activities related to AP1189 and new chemical molecules and to cover general administration costs. Due to the Rights Issue, the Board of Directors has resolved that the Company’s interim report for Q1 2022 will be published on 30 May 2022 instead of 6 May 2022, as previously communicated.

Summary

  • The Rights Issue comprises a maximum of 2,364,208 shares and will provide SynAct with proceeds of up to approximately SEK 150 million before transaction costs.
  • The subscription price has been set to SEK 63 per share.
  • The record date for the Rights Issue will be 4 April 2022 and the subscription period will commence on 6 April 2022 and end on 22 April 2022.
  • Existing shareholders, as of the record date of 4 April 2022, will receive one (1) subscription right for every existing share held. Eleven (11) subscription rights entitles to the subscription of one (1) new share.
  • The Rights Issue is guaranteed to an amount of approximately SEK 150 million, corresponding to 100 percent, through a combination of subscription and guarantee commitments. Subscription commitments of approximately SEK 2 million in total have been received from the Company’s Board of Directors and management team. Furthermore, guarantee commitments of approximately SEK 148 million in total have been provided by external investors, including Formue Nord Markedsneutral A/S, Maven Investment Partners Ltd, Modelio Equity AB, Wilhelm Risberg, Fredrik Lundgren and Exelity AB.
  • The Over-allotment Option that the Board of Directors may resolve on consists of up to 395,000 new shares and may provide SynAct with additional proceeds of up to approximately SEK 25 million, conditional upon the Rights Issue being oversubscribed. The reason for deviating from the shareholders’ preferential rights is to meet a higher demand than initially estimated. The subscription price in the Over-allotment Option will correspond to the subscription price in the Rights Issue.
  • The proceeds from the Rights Issue will be used for conducting additional clinical phase 2 development with AP1189 in rheumatoid arthritis (RA), continue development of AP1189 for kidney disease in a re-designed study set-up, other research and development activities related to AP1189 and new chemical molecules and to cover general administration costs.

Background and rationale

The Company’s primary development project is focused on its primary drug candidate AP1189, which is currently being developed as a treatment method for patients with rheumatoid arthritis (”RA”). In the fourth quarter 2021, the Company reported statistically significant and clinically relevant treatment effects of the Company’s drug candidate AP1189, following 4 weeks treatment in patients with severe RA in the Company’s BEGIN study. The data from the study strongly supports further development of AP1189, a potential first-in-class selective melanocortin type 1 and 3 receptor drug in RA.

In parallel with the clinical development of the BEGIN study, the Company has conducted additional pre-clinical development to support longer treatment in humans than the 4 weeks treatment applied in the BEGIN study. Moreover, and not less important, the Company has conducted a combined bioequivalence and pharmacokinetic study of a new tablet formulation to be used for further development and potential commercialization. This study has identified the tablet as having a very beneficial exposure profile that makes is possible to continue development of the AP1189 project in RA using this new and IP-protected tablet formulation.

The Company intends to initiate two additional Phase 2 clinical RA studies with AP1189 in 2022 with the net proceeds from the Rights Issue.

The Company is also conducting a clinical phase 2a study with AP1189 for Nephrotic Syndrome (“NS”) and announced in November 2021 that the current phase 2a study would undergo a larger design change to benefit from the Company’s newly developed tablet and the possibility of treatment for up to three months. The work to have the study setup in a re-designed setup is ongoing and data from the optimized study is expected to be reported during 2023.

In addition, the Company recently completed a phase 2a study on patients with Covid-19, the RESOVIR-1 study, with the purpose of evaluating if AP1189 could shorten the recovery from breathing difficulties and prevent acute respiratory distress syndrome (“ARDS”). Following positive data from this study, the Company has evaluated the possibility to conduct additional clinical development in Covid-19 patients. However, as the omicron variant of the virus has been dominating, the symptomatology of the disease has changed, and it was decided to postpone further clinical development within Covid-19 until further. Currently, the Company evaluates potential opportunities for AP1189 for treatment of non-Covid-19-induced respiratory insufficiency. Further development of AP1189 for treatment of virus induced respiratory insufficiency will be based on this ongoing pharmacology program and will be communicated when more data is available.

In order to support the Company’s general goals and strategy, including the abovementioned development plans, the Board of Directors of SynAct has today resolved, pursuant to the authorization granted by the annual general meeting on 21 May 2021, to carry out the Rights Issue. In addition, the Board of Directors may, based on the authorization granted by the annual general meeting on 21 May 2021, resolve on the Over-allotment Option, in the form of a directed issue of up to approximately SEK 25 million, conditional upon the Rights Issue being oversubscribed. The reason for the Over-allotment Option, and the deviation from the shareholders’ preferential rights, is to meet a higher demand than initially estimated. The subscription price in the Over-allotment Option will be the same as in the Rights Issue.

Through the Rights Issue, SynAct will receive approximately SEK 150 million before issue costs, which are expected to approximately SEK 24 million. The net proceeds from the Rights Issue amount to approximately SEK 126 million and is planned to be used for the following purposes in order of priority:

  • Conducting additional clinical phase 2 development with AP1189 in RA, approximately 51 percent.
  • Continue development of AP1189 for kidney disease in a re-designed study set-up, approximately 7 percent.
  • Other research and development activities related to AP1189 and new chemical molecules, approximately 22 percent.
  • General administration costs, approximately 20 percent.

If the Over-allotment Option is utilised in its entirety, the Company receives additional proceeds of approximately SEK 25 million before transaction costs, which are expected to approximately SEK 2 million. The potential net proceeds of approximately SEK 23 million from the Over-allotment Option are intended to be used in its entirety to fund research and development activities further strengthening the early pipeline and the Company’s CMC process and capabilities.

Terms and additional information about the Rights Issue and the Over-allotment Option

According to the terms of the Rights Issue, one (1) subscription right will be received for every existing share as of the record date on 4 April 2022. Eleven (11) subscription rights entitle to subscription of one (1) new share. The subscription price per share amounts to SEK 63.

In total, a maximum of 2,364,208 shares will be issued through the Rights Issue, corresponding to an amount of approximately SEK 150 million before transaction costs, which are expected to amount to approximately SEK 24 million (of which costs for guarantee commitments amount to approximately SEK 13 million).

Anyone registered as a shareholder on the record date of 4 April 2022 in the shareholder register held by Euroclear Sweden AB is entitled to a preferential right to subscribe for new shares in relation to the number of shares already held by that shareholder.

The subscription period will commence on 6 April 2022 and end on 22 April 2022. The Board of Directors has the right to extend the subscription and payment period. A possible extension of the subscription period shall be announced by press release no later than the last subscription day in the Rights Issue, i.e. 22 April 2022. Trading in subscription rights takes place on Spotlight Stock Market during the period from and including 6 April 2022 to and including 19 April 2022, and trading in paid subscribed shares (Sw. betalda tecknade aktier) during the period from and including 6 April 2022 until the Rights Issue has been registered with the Swedish Companies Registration Office (Sw. Bolagsverket).

If not all shares are subscribed for by exercise of subscription rights, allotment of the remaining shares shall be made within the highest amount of the Rights Issue: firstly, to those who have subscribed for shares by exercise of subscription rights (regardless of whether they were shareholders on the record date or not) and who have applied for subscription of shares without exercise of subscription rights and if allotment to these cannot be made in full, allotment shall be made pro rata in relation to the number of subscription rights that each and every one of those, who have applied for subscription of shares without exercise of subscription rights, have exercised for subscription of shares; secondly, to those who have applied for subscription of shares without exercise of subscription rights and if allotment to these cannot be made in full, allotment shall be made pro rata in relation to the number of shares the subscriber in total has applied for subscription of shares; and thirdly, to those who have provided underwriting commitments with regard to subscription of shares, in proportion to such underwriting commitments. To the extent that allotment in any section above cannot be done pro rata, allotment shall be determined by drawing of lots.

Conditional upon the Rights Issue being oversubscribed, the Board of Directors may, in whole or in part, resolve on the Over-allotment Option of up to approximately SEK 25 million before transaction costs, which are expected to approximately SEK 2 million. The Over-allotment Option consist of up to 395,000 new shares and the subscription price is SEK 63 per share. The reason for the Over-allotment Option, and the deviation from the shareholders’ preferential rights, is to meet a higher demand than initially estimated. The right to subscribe for shares in the Over-allotment Option shall vest in those who subscribe for shares in the Rights Issue without receiving full allotment.

Shares and dilution

In connection with the Rights Issue, the number of shares in SynAct will increase with up to 2,364,208 shares and subsequently amount to a maximum of 28,370,503 shares in total. Existing shareholders that do not take part in the Rights Issue will be diluted by approximately 8.3 percent of the total number of shares and votes in the Company after the Rights Issue. Shareholders that choose to not participate in the Rights Issue have the possibility to be gain economic compensation for the dilution effect by selling their subscription rights.

If the Over-allotment Option is exercised in full, there will be an additional increase in the total number of shares of up to 395,000 new shares.

In case the Rights Issue and the Over-allotment Option are both exercised in full, the total number of shares in the Company will increase by 2,759,208 shares to 28,765,503 shares. The dilution effect will amount to up to approximately 9.6 percent based on the number of shares after the Rights Issue and the Over-allotment Option.

Subscription commitments and guarantees

The Rights Issue comprises 100 percent subscription and guarantee commitments, of which subscription commitments represent approximately 1 percent and guarantee commitments represent approximately 99 percent. Subscription commitments have been received from the Company’s Board of Directors and management team. These undertakings amount to approximately SEK 2 million, representing approximately 1 percent of the Rights Issue.

In addition, the Rights Issue is covered by guarantee commitments of approximately SEK 148 million, representing approximately 99 percent of the Rights Issue. The guarantee commitments have been undertaken by external investors including Formue Nord Markedsneutral A/S, Maven Investment Partners Ltd, Modelio Equity AB, Wilhelm Risberg, Fredrik Lundgren and Exelity AB.

A guarantee commission of 9 percent of the guaranteed amount in cash consideration will be paid for the guarantee commitments, based on current market conditions. No consideration will be paid for the subscription commitments that have been entered into. These subscription and guarantee commitments are not secured through bank guarantees, restricted funds, pledged assets or similar arrangements. Further information on the parties who have entered into guarantee commitments will be presented in the prospectus, which the Company expects to publish on or around 1 April 2022.

Lock-up agreements

In connection with the Rights Issue, the Company has undertaken towards the Joint Global Coordinators, subject to customary exceptions (such as issuing shares or share-related instruments in connection with company acquisitions and incentive programs), not to issue additional shares or other share-related instruments for a period of 180 days after the publication of the outcome of the Rights Issue. In addition, the Company’s board members and senior executives who own shares in SynAct have undertaken towards the Joint Global Coordinators, subject to customary exceptions, not to transfer or otherwise sell their shares for a period of 180 days after the publication of the outcome of the Rights Issue. During the first 90 days after the publication of the outcome of the Rights Issue, the commitment covers 100 percent of each person's shareholding and for the remainder of the lock-up period, the commitment covers 90 percent of each person's shareholding. Joint Global Coordinators can, if they deem it appropriate in the individual case, grant exemptions from the relevant commitments and then the shares can be offered for sale.

Preliminary timetable

  • 1 April 2022: First day of trading in the SynAct share, excluding the right to receive subscription rights
  • 1 April 2022: Expected day for publication of prospectus
  • 4 April 2022: Record date for the Rights Issue
  • 6 April - 22 April 2022: Subscription period
  • 6 April - 19 April 2022: Trading in subscription rights
  • 6 April - 10 May 2022: Trading in paid subscribed shares (“BTAs”)
  • 26 April 2022: Expected day for publication of the outcome of the Rights Issue

Prospectus

Complete terms and conditions for the Rights Issue and the Over-allotment Option, and other information about the Company will be provided in the prospectus (the “Prospectus”) which the Company expects to publish on or around 1 April 2022. The Prospectus and a subscription form will be made available on SynAct’s website, www.synactpharma.com, Nordic Issuing’s website, www.nordic-issuing.se, and ABG Sundal Collier’s website, www.abgsc.com.

Postponing the interim report for Q1 2022

Due to the Rights Issue, the Board of Directors has resolved that the Company’s interim report for Q1 2022 will be published on 30 May 2022 instead of 6 May 2022, as previously communicated.

Advisors

ABG Sundal Collier AB and Kempen & Co are Joint Global Coordinators in connection with the Rights Issue. Setterwalls Advokatbyrå AB acts as legal counsel to SynAct. Baker McKenzie Advokatbyrå KB acts as legal counsel to Joint Global Coordinators. Nordic Issuing AB acts as issuing agent in connection with the Rights Issue.

Conference Call Details

SynAct will host an audiocast and telephone conference on March 28 at 10:00 a.m. CEST, with the following participants:

Jeppe Øvlesen, CEO

Thomas Jonassen, CSO

Patrik Renblad, CFO

Web link: https://financialhearings.com/event/44277

Participant Dial-in Numbers:

SE: +46 856642651 PIN: 36055495#

UK: +44 3333000804 PIN: 36055495#

US: +1 6319131422 PIN: 36055495#

Important information

The information in this press release does not contain or constitute an offer to acquire, subscribe or otherwise trade in shares or other securities in SynAct. No action has been taken and measures will not be taken to permit a public offering in any jurisdictions other than Sweden and Denmark.

This release is not a prospectus in accordance to the definition in the Prospectus Regulation (EU) 2017/1129 (“Prospectus Regulation”) and has not been approved by any regulatory authority in any jurisdiction. 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 shares or other securities in SynAct. A prospectus will be prepared and in connection with the Rights Issue and be reviewed and approved by the Swedish Financial Supervisory Authority (Sw. Finansinspektionen) which is the national competent authority in Sweden with regard to the Prospectus Regulation. In order for investors to fully understand the potential risks and benefits associated with a decision to participate in the Rights Issue, any investment decision should only be made based on the information in the Prospectus. Thus, investors are encouraged to review the Prospectus in its entirety. In accordance with article 2 k of the Prospectus Regulation this press release constitutes an advertisement.

The information in this press release may not be released, distributed or published, directly or indirectly, in or into the United States of America, Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa, South Korea, Switzerland or any other jurisdiction in which such action would be unlawful or would require registration or any other measures than those required by Swedish law. Actions in violation of these restrictions may constitute a violation of applicable securities laws. No shares or other securities in SynAct have been registered, and no shares or other securities will be registered, under the United States Securities Act of 1933, as amended (the “Securities Act”) or the securities legislation of any state or other jurisdiction in the United States of America and no shares or other securities may be offered, sold or otherwise transferred, directly or indirectly, in or into the United States of America, except under an available exemption from, or in a transaction not subject to, the registration requirements under the Securities Act and in compliance with the securities legislation in the relevant state or any other jurisdiction of the United States of America.

Within the European Economic Area (“EEA”), no public offering of shares or other securities (“Securities”) is made in other countries than Sweden and Denmark. In other member states of the EU, such an offering of Securities may only be made in accordance with the Prospectus Regulation. In other member states of the EEA which have implemented the Prospectus Regulation in its national legislation, any offer of Securities may only be made in accordance with an applicable exemption in the Prospectus Regulation and/or in accordance with an applicable exemption under a relevant national implementation measure. In other member states of the EEA which have not implemented the Prospectus Regulation in its national legislation, any offer of Securities may only be made in accordance with an applicable exemption under national law.

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 EU Prospectus Regulation (2017/1129/ EU) 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 may contain forward-looking statements which reflect the Company’s current view on future events and financial and operational development. Words such as “intend”, “expect”, “anticipate”, “may”, “believe”, “plan”, “estimate” and other expressions which imply indications or predictions of future development or trends, and which are not based on historical facts, are intended to identify forward-looking statements. Forward-looking statements inherently involve both known and unknown risks and uncertainties as they depend on future events and circumstances. Forward-looking statements do not guarantee future results or development and the actual outcome could differ materially from the forward-looking statements.

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.

This disclosure contains information that SynAct is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 28-03-2022 07:00 CET.

For further information about SynAct Pharma AB, please contact:  

Jeppe Øvlesen                                    
CEO, SynAct Pharma AB                    
Phone: +45 28 44 75 67                       
Mail: joo@synactpharma.com           

Thomas Jonassen
CSO, SynAct Pharma AB
Phone: +45 40 15 66 69
Mail: tj@synactpharma.com

About SynAct Pharma AB 

SynAct Pharma AB conducts research and development in inflammatory diseases. The company has a platform technology based on a new class of drug candidates aimed at acute deterioration in chronic inflammatory diseases with the primary purpose of stimulating natural healing mechanisms. For more information: www.synactpharma.com. 

Subscribe

Documents & Links