Board Changes and Placing

RNS Number : 5529C

e-Therapeutics plc

11 February 2020

 

11 February 2020

e-therapeutics plc

Board Changes and £1.6m Placing

Oxford, UK, 11^th February 2020 - e-therapeutics plc (AIM: ETX, "e-therapeutics" or the "Company") today announces a restructuring of the Board and Management Team and a £1.6 million placing.

Board & Management Changes

Iain Ross is standing down as Non-Executive Chairman to concentrate on his interim Executive Chairman role at Silence Therapeutics plc. Ali Mortazavi has been appointed Executive Chairman with immediate effect. Mr Mortazavi has extensive experience in the biotechnology sector and financial markets. Recent roles include CEO of Silence Therapeutics plc from 2012-2018 as well as a founder shareholder of Evolution Group, a U.K. based Investment Bank, from 2001-2008. Ali is an experienced investor in small companies and has held numerous declarable stakes in listed and private biotechnology and technology companies. Ray Barlow has stood down as Chief Executive Officer with immediate effect but has agreed to remain with the Company for a period of time to provide support to Ali Mortazavi and ensure an effective transition. Steve Medlicott, Chief Financial Officer, has also stood down from the Board with immediate effect.

Trevor Jones will remain as an Independent Non-Executive Director and Michael Bretherton has been appointed as Non-Executive Director to replace Christine Soden who is also standing down from the Board. The Company intends to appoint a further independent non-executive director to the Board in due course.

£1.6 million Placing

Overview

The Company has carried out a placing of 53,302,355 new ordinary shares of 0.1p each (the "Placing Shares") at a price of 3.0 pence per share (the "Placing Price") to raise gross proceeds of £1.6 million (the "Placing") which will be used for general working capital purposes. The Placing has been undertaken directly by the Company with certain existing and new investors.

The Placing Shares represent approximately 19.8% of the issued share capital of the Company prior to the Placing, which is within the Company's existing non pre-emptive share issuance authorities. The Placing Price represents an approximately 24% discount to the closing middle market price of 3.97 pence per ordinary share on 10 February 2020, being the last trading day immediately preceding the date of this Announcement. 

Details of the Placing

The Placing Shares, when issued, will be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of 0.1 pence each in the capital of the Company, including the right to receive all dividends and other distributions declared, made or paid on or in respect of such ordinary shares after the date of issue.

Application will be made for the Placing Shares to be admitted to trading on AIM and it is expected the admission of the Placing Shares will take place at 8.00am on 18 February 2020 ("Admission"). The Placing is conditional upon Admission becoming effective.

The Company's total issued share capital following completion of the Placing will consist of 322,427,853 ordinary shares of 0.1 pence each with one voting right per share (assuming no options are exercised in the period between this announcement and Admission). The above figure of 322,427,853 may be used by shareholders as the denominator for the calculations by which they can determine if they are required to notify their interest in, or a change to their interest in, the Company following Admission.

The Company has conducted the Placing as principal.

Related Party Transaction 

Richard Griffiths, and his controlled undertakings ("Richard Griffiths"), which currently hold 78,800,167 existing ordinary shares (representing approximately 29.3 per cent. of the Company's existing issued share capital), has agreed to subscribe for a total of 16,000,000 Placing Shares. As a consequence of Richard Griffith's current interest in the Company, his proposed participation in the Placing is a related party transaction pursuant to AIM Rule 13. Accordingly, the directors in office upon approval of the Placing, confirm that, having consulted with the Company's Nominated Adviser, the terms of Mr Griffith's subscription are fair and reasonable insofar as the Company's shareholders are concerned.  

Ali Mortazavi, Executive Chairman, commented: "Having spent an extensive period of time conducting deep due diligence on e-therapeutics' NDD platform, I am extremely impressed with the company's capabilities. They have consistently demonstrated their ability to uncover important biological insights and to identify active drug-like compounds that show strong activity in complex translatable screens and can be optimised into novel chemical entities.

In addition, the Company's GAINs platform allows actionable insights (mechanistic understanding, target or network driven drug discovery hypotheses) to be derived from GWAS (Genome Wide Association Studies) data where there may be multiple and individually uninformative variants contributing to disease risk. This recent product addition is significant, differentiated and meets a critical industry need as the volume of genomic data rises.

In both the NDD and GAINs area of the business, the Company has multiple and incoming business development opportunities with some of the largest global pharmaceutical and biotechnology companies; all of whom need a better and differentiated understanding of biology in a variety of disease areas. It is envisaged that the company may choose to develop proprietary drug interventions where the data generated in house has high differentiation and value.

I would like to thank Ray Barlow and the former Directors of e-therapeutics for their contribution to the company. Together with the current R&D team, they have developed a powerful platform and ensured industry recognition of its value. 

Outgoing Chairman Iain Ross added: "Ali has made a significant personal investment in e-therapeutics and I believe he is well positioned to take the Company forward. I would like to thank Ray, Steve and Christine for their support over the last few years and to wish them every success in the future."

Professor Trevor Jones, Independent Non-Executive Director, commented "In recent years, our understanding of biological networks that are involved in a wide variety of disease has increased massively; especially with the explosion of data on their genomic origins. The team at e-therapeutics has developed a unique approach to identifying druggable compounds that can disrupt these biological pathways in ways that are potentially profoundly more active than conventional single target-based drug discovery. The interest shown by pharmaceutical and biotech companies in the e-therapeutics NDD and GAINS platforms is testament to their potential to provide significantly improved therapies. The Company is at an exciting stage of its growth and I thank the team for their continuing commitment to this goal." 

Additional disclosures re Board Changes

In addition to the appointment to the Board, Ahmad Ali Mortazavi aged 49, holds or has held the following directorships in the past 5 years.

Current directorships	Previous directorships held in the last 5 years
HANNESAMI LLP	SILENCE THERAPEUTICS PLC

Mr Mortazavi currently owns a total of 49,000,000 ordinary shares in the Company representing 18.2% of e-therapeutics' issued share capital.

In addition to the appointment to the Board, Michael Anthony Bretherton aged 64, holds or has held the following directorships and partnerships in the past 5 years.

Current directorships	Previous directorships held in the last 5 years
Adams PLC	DEEPMATTER GROUP PLC
ORA Limited
Sarossa PLC
Hardy Oil and Gas
Blake Holdings  Limited

Michael Bretherton was a non-executive director of Brimley & Co. Limited ("Brimley"), a wholly owned subsidiary of Bridgend Group plc until the reverse acquisition of that company by Hemscott Holdings Limited on 15 August 2000, at which time he resigned from the board of the enlarged Hemscott company and all its subsidiaries including Brimley.  Subsequent to that acquisition and Mr Bretherton's resignation, the business and certain assets of Brimley were sold, its name was changed to XLIV Limited and it was then placed into creditors voluntary liquidation on 31 October 2000 with an estimated deficiency as regards external creditors of £168,000.

There is no further information that is required to be disclosed with regards to the appointment of Ali Mortazavi and / or Michael Bretherton pursuant to Schedule 2 paragraph (g) of the AIM Rules.

IMPORTANT NOTICE

This announcement contains inside information for the purposes of Article 7 of EU Regulation 956/2014.

- Ends -

For further information, please contact:

e-therapeutics plc	Tel: [phone]
Ali Mortazavi, Executive Chairman	www.etherapeutics.co.uk
Numis Securities Limited	Tel: [phone]
James Black (Corporate Broking)
Freddie Barnfield/Duncan Monteith (Nominated Adviser)	www.numis.com
FTI Consulting	Tel: [phone]
Simon Conway	Email: [e-mail]

 

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