Premaitha has announced the conditional acquisition of the entire issued share capital of Yourgene.
The consideration for the acquisition is the issue of 76,054,570 new ordinary shares in the Company (the “Acquisition Shares”) at a price of $ 0,11 per share (being the mid-market closing price of the shares on 20 December 2016, the last practicable date prior to announcement of the Acquisition), and cash consideration of US$500,000, to be funded out of Yourgene’s existing cash reserves. The acquisition shares will represent approximately 25% of the issued ordinary share capital of the Company as enlarged by the acquisition shares.
Yourgene is a significant Asian NIPT bioinformatics specialist based in Taiwan. It has a commercial hub in Singapore and annual sales of circa £2.0 million generated from across South East Asia and India, and is broadly break-even at these trading levels.
The acquisition brings Premaitha significant benefits through expanded market access in Asia, the world’s fastest growing NIPT market, and opportunities for cross-selling. In addition, the combination enables joint development of expanded NIPT test content as well as further content beyond NIPT, such as pre-implantation genetic screening. The combination also offers the potential to reduce intellectual property risks through geographic diversification and product enhancements.
Furthermore, the combination with Yourgene creates a platform for a strategic drive into mainland China where there are approximately 17 million births per annum and a strategy to decentralise NIPT testing over the coming years as part of the Chinese government’s healthcare reform plans, Premaitha said in its press release issued on Wednesday.
Yourgene has a NIPT patent granted in Taiwan, a territory where there is no registration of patents equivalent to those being used by Illumina in European litigation. Yourgene has also filed applications for this patent in China, the USA and at the European Patent Office. The combination of Premaitha and Yourgene offers the potential to further reduce intellectual property risks through geographic diversification and product enhancements which more clearly accentuate Premaitha’s non-infringement claims.
On completion of the Acquisition, Dr Bill Chang and Alan Chang (both directors of Yourgene) will be appointed to the Board of Premaitha as Chief Scientific Officer and Non-executive Director respectively.
A circular will shortly be posted to Premaitha shareholders seeking approval of the acquisition, authority for the Directors to issue the acquisition shares and approval of the share sub-division.
The acquisition will become unconditional following the passing of the resolutions to be proposed at the General Meeting, the London Stock Exchange agreeing to admit (subject only to their allotment) the acquisition shares to trading on AIM and the granting of the regulatory approval of the acquisition required by Taiwanese law. This is expected to occur by no later than 31 January 2017.
The Board will also seek shareholder approval to reorganise the Company’s share capital as the market price of its existing ordinary shares is below their par value of $0,12 per share. This situation prevents the Board issuing new ordinary shares (including the acquisition shares) as English company law prohibits a company from issuing a share at a price that is less than its par value. The Company is therefore proposing to divide each existing ordinary share of $0,12 into one ordinary share of $0,001 and one deferred share of $0,119.
Dr Stephen Little, CEO of Premaitha Health, commented: “We are extremely excited about the transaction with Yourgene and their like-minded management team who have demonstrated their commitment to the enlarged group through a significant shareholding. They have successfully established a highly complementary business in South East Asia and we look forward to working together to build a truly global force in this emerging sector. The Board believes that Asia Pacific will be a key region for driving sales growth, and Yourgene is an important enabler for the newly enlarged Premaitha group.”