Transgene announces €48 M rights issue, reports €1,1M operating revenue decrease

Transgene, a company focused on designing and developing targeted immunotherapies for the treatment of cancer and infectious diseases, announced the launch and terms of a share capital increase with shareholders’ preferential subscription rights for a total gross amount of circa €48 million, issue premium included (the “Rights Issue”).

The Company explained that intends to use the net proceeds from the offering to reinforce its financial structure until the end of 2018 in order to carry out its clinical development plan with the launch of seven clinical trials currently under preparation, evaluating its five clinical-stage drug candidate products and allow the Company to negotiate partnership agreements based on the results obtained from 2017 onwards.

Mr. Philippe Archinard, Chairman and CEO of Transgene, commented: “With a mature and diversified product portfolio, Transgene is ideally positioned to be one of the major players of the new paradigm of immuno-oncology. Our therapeutic vaccines and our oncolytic viruses have produced encouraging data to date and are ideally suited to be used in combination with immune checkpoint inhibitors (ICIs), part of the future standards of care. The recent signing of a collaboration agreement with Merck KGaA, Darmstadt, Germany, and Pfizer, to evaluate Avelumab, an investigational ICI, in combination with TG4001, confirms the relevance of our approach. In the coming months, Transgene will launch five clinical trials combining three of our immunotherapies with ICIs that are expected to demonstrate the synergic effects of these two classes of immunotherapies. Also, two additional proof-of-concept first-in-human trials, conducted with two other products, will deliver readouts from next year on, in parallel to the ongoing recruitment of the Phase 3 trial of Pexa-Vec conducted by our partner SillaJen. Our goal is clear: we aim to obtain first data readouts from 2017 that will be key for the development of our products and to negotiate partnership or co-development agreements.”

The Rights Issue is expected to result in the issuance of 18,501,780 new shares at a price of €2.60 per share, comprising a nominal value of €1.00 and an issue premium of €1.60, for total gross proceeds (issue premium included) of €48,104,628. This number of new shares may be increased to a maximum of 18,878,952 shares upon exercise before the close of business on October 26, 2016, of the financial instruments giving access to the share capital of the Company for which an undertaking of non-exercise has not been given resulting in maximum gross proceeds (issue premium included) of €49,085,275.20, said Transgene.

The company also announced that each shareholder of the Company will receive, on October 27, 2016, one preferential subscription right for every share registered in its securities account following the business day of October 26, 2016. 25 preferential subscription rights allow their holders to subscribe for 12 new shares on an irreducible basis (à titre irréductible).

Subscription for new shares may also be made on a reducible basis (à titre réductible) but remain subject to a reduction in the event of over-subscription. Any new shares that are not subscribed to on an irreducible basis shall be distributed and allocated to the holders having subscribed on a reducible basis.

Based on Transgene’s closing share price on the regulated market of Euronext in Paris (“Euronext Paris”) on October 19, 2016, i.e. €3.08, the theoretical value of one preferential subscription right amounts to €0.156 and the theoretical value of the share ex-rights (“TERP”) amounts to €2.92.

The subscription price represents a discount of 15.58% compared to Transgene’s closing share price on October 19, 2016 and a discount of 11.08% to TERP compared to Transgene’s closing share price on October 19, 2016.

The Rights Issue consists of a public offering in France only and a private placement to international investors outside of France.

Natixis acts as Global Coordinator and Joint Bookrunner and Kempen & Co acts as Joint Bookrunner for the Rights Issue.

The subscription period during which holders of preferential subscription rights can exercise such rights and subscribe for new shares will begin on October 27, 2016 and will end on November 4, 2016 inclusive. Preferential subscription rights that are not exercised before the end of the subscription period, namely before the close of the trading day of November 4, 2016, will lapse automatically, said Transgene.

The company also reported today €1,1M operating revenue decrease in its quarterly financial results as of September 30, 2016.