Cash Placing

RNS Number : 0427T

Epistem Holdings plc

07 December 2012

 



Epistem Holdings Plc

7 December 2012

Epistem Holdings Plc ("Epistem" or the "Company")

£4.3 million Cash Placing

Epistem (AIM: EHP), the biotechnology and personalised medicine company, is pleased to announce that it has agreed to raise approximately £4.3 million before expenses through a placing for cash of 793,398 new ordinary shares of 1.5 pence each with a range of existing and new institutional investors. 

The new ordinary shares, which represent 8.9 per cent. of Epistem's issued share capital (being the Company's entire section 551 authority approved by shareholders at the 2011 annual general meeting), have been conditionally placed at a price of 545 pence per share. This placing price equates to a 4.0 per cent. discount to the closing middle market price on 6 December 2012.  Peel Hunt LLP is acting as Nominated Adviser and Broker to Epistem and has fully underwritten the placing. 

The net proceeds of the placing of some £4.2 million will provide additional development capital for the Company as it approaches the anticipated commercial launch of Genedrive™ its new molecular diagnostic device and its first tuberculosis assay.  As announced in the Company's preliminary results issued on 16 October 2012, the Company's collaborations with Becton Dickinson and Xcelris Laboratories include escalating annual volume requirements for units and assays with each contract capable of delivering revenues to Epistem in excess of US$20m-30m per annum over the next 3-5 years.  The Company anticipates a significant step up in its working capital requirements with its first regulated test on Genedrive™ for the tuberculosis market expected to generate initial sales in Q1 2013.  Regulatory approval of the tuberculosis assay specific to the Indian subcontinent is expected in H1 2013. The launch will also signal the rapid acceleration and development of an extensive range of assays to exploit the substantial opportunities available to the Genedrive™ platform. These assays will cover tests for infectious diseases including malaria, dengue fever, typhoid, HIV, HCV and a panel of sexually transmitted diseases. Alongside infectious disease opportunities, the Company will increase investment in the development of oncology, biosurveillance and forensics test targets. The placing will fund an increase in resource and personnel dedicated to Genedrive™ as well as capital expenditure to significantly improve production capabilities and is aimed at establishing Genedrive™ as the leading molecular diagnostic platform for speed to result, ease of use, cost and scope of testing in near patient settings where the Directors believe the Company currently holds a significant advantage in comparison with other technologies in development. Finally, the net proceeds of the Placing will provide the Company with a strengthened balance sheet and enhance the Company's ability to pursue a range of strategic options in the future as the Company's various operating divisions continue to develop. 

Application will be made to the London Stock Exchange for the new ordinary shares to be admitted to trading on AIM. Admission in respect of 793,398 new ordinary shares is expected to be effective on 13 December 2012. When issued, the new ordinary shares will rank pari passu in all respects with the Company's existing ordinary shares. Following completion of the placing, Epistem will have 9,659,707 ordinary shares of 1.5 pence each in issue.

Commenting on the Placing, Matthew Walls, CEO of Epistem, said: "We are about to enter a new and exciting phase of growth for Epistem with the launch of Genedrive™, our first healthcare/diagnostic product. We believe Genedrive™ can change the way diagnostics is delivered in 'near patient' settings by providing the 'gold standard' of DNA based test results at significantly reduced cost in a simple to use device form. We are grateful for the continued support and strength of our existing holders and welcome a number of new investors to Epistem. The net proceeds from this placing will be used to support the growth in the working capital and capital expenditure requirements of Genedrive™, the accelerated development of our applications test menu and will strengthen our balance sheet at this strategically important time."                

For further details please contact:

Epistem Holdings Plc

Matthew Walls: Chief Executive Officer                                                           [phone]

John Rylands: Finance Director                                                                        

Peel Hunt LLP

James Steel                                                                                                         [phone]

Vijay Barathan

Cubitt Consulting Limited

Mike Wort                                                                                                              [phone]

Anna Dunphy

Notes to Editors:

Epistem is a biotechnology and personalised medicine company commercialising its expertise in epithelial stem cells and pharmacogenomics in the areas of oncology, gastrointestinal, dermatological and infectious disease.

Epistem develops innovative therapeutics, biomarkers and diagnostics alongside providing preclinical services to drug development companies. Epistem's core expertise is focused on the regulation of adult stem cells located in epithelial tissue which includes the gastrointestinal tract, skin, hair follicles, breast and prostate. Epistem also has a range of proprietary amplification (RNA and DNA) technologies for use in drug discovery, development and diagnostics.

 

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