Framework agreement, licence and £10m investment

RNS Number : 6376A

Oncimmune Holdings PLC

02 January 2018

 

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

Oncimmune Holdings plc

("Oncimmune" or the "Company")

Framework for an Exclusive Licence of EarlyCDT Technology to Genostics Co. Ltd for China, a Future Collaboration and a £10m Investment in Oncimmune

-     Licence agreement of EarlyCDT Technology for China, with initial focus on EarlyCDT®-Lung

-     Minimum royalty payments total £15.7 million in first six years post market entry

-     Provides access to market in which lung cancer is the number one killer, with over 700,000 cases diagnosed annually, and 350 million adult smokers in 2015

-     £10m equity investment in Oncimmune at 49% premium, subject to Shareholder approval

Nottingham, UK - 2 January 2018: Oncimmune Holdings plc (AIM: ONC.L), a leading early cancer detection company developing and commercialising its proprietary EarlyCDT® platform technology, today announces that it has signed a framework agreement for an exclusive licence with Genostics Company Limited ("Genostics"), a Hong Kong registered company part of the Gene Group Holdings Limited group ("GGH"), a leading R&D, manufacturing, marketing and distribution Company in China focused on immunological and molecular diagnostic products in the fields of oncology, pathology, hematology and cytogenetics. The agreement is for the distribution, manufacturing and future development of all products related to Oncimmune's EarlyCDT® platform for the People's Republic of China, with an initial focus on EarlyCDT®-Lung. Cancer is the leading cause of death in China and a major health problem and lung cancer is the number one killer of both men and women with over 700,000 cases diagnosed annually. Early diagnosis has the potential to make a significant impact as mortality increases sharply with advanced disease. 

The framework sets the terms for the licence agreement under which Genostics will start to sell EarlyCDT®-Lung within 36 months of the date of the agreement, subject to China FDA ("CFDA") approval, although both parties expect this to be sooner. Oncimmune will receive a royalty of c.8% on the gross revenue subject to minimum royalty payments over the first six years post market entry of £15.7 million on aggregate and £5 million (index linked) per year thereafter.

As part of the framework agreement, Genostics has agreed, subject to Shareholder approval, to invest £10m in Oncimmune by way of subscription for 6,410,256 new ordinary shares at a price of £1.56 per ordinary share, a 49% premium to the share price of 105p at market close on 29 December 2017 ("Genostics Subscription"). This will be allocated in two tranches, the first £7m following a General Meeting expected to be held later in January 2018, and the second (£3m) by 30 March 2018. The exclusive technology licence agreement will be signed following the first subscription. Application will be made for the New Ordinary Shares to be admitted to trading on AIM ("Admission").

It has also been agreed that a representative from Genostics will be appointed to the Board of Directors of Oncimmune. An announcement will be made once this is finalised.

As part of the agreement with Genostics, GeneTech(Shanghai), a subsidiary of GGH, will be responsible for the manufacturing, marketing and distribution of EarlyCDT®-Lung. In addition to this and in collaboration with Oncimmune, a potential to transfer of manufacturing to China for that market and the rest of the world will be explored, as well as research and development to progress the Oncimmune EarlyCDT® platform technology into new areas of prevalent cancers.

Geoffrey Hamilton-Fairley, CEO of Oncimmune, commented: "Oncimmune continues to deliver on our stated strategy at the time of the IPO; a key part of this was a commercial agreement for China.

"Today, we are delighted to have signed an agreement for the EarlyCDT® platform with Genostics for the People's Republic of China, a partner we have confidence has the reach to deliver on this very large market opportunity. We look forward to working with them and believe the funds from the equity subscription of this deal will unlock further opportunities across indications as well allowing us to develop new technologies that will result in more lives being saved, at the same time as money is saved for healthcare systems."

Dr. Cheung To, Chairman, Genostics Co. Limited, "Genostics is delighted to sign this agreement with Oncimmune and we are excited by the prospect of commercialising the EarlyCDT®platform in the People's Republic of China. The test has proven it can detect cancer up to four years earlier than other methods and this has the potential to significantly improve the outcomes for cancer patients through early detection of the disease and by enhancing the treatment pathway.

"This deal means we can now offer early detection of cancer which augments our product portfolio in our specialized area of pathology and oncology. The EarlyCDT® platform is complementary to our current molecular diagnostic product line which uses the latest PCR, sequencing and microarray technologies and, by combining forces with Oncimmune, we will accelerate the technological and commercial development of the EarlyCDT® platform, which will ultimately benefit more Chinese patients."

General Meeting

The Company will be convening a General Meeting for the purpose of considering and, if approved, passing resolutions to provide the directors with the authority to issue the ordinary shares under the Genostics Subscription.  Further information regarding the date, timing and location, will be provided in due course.

Cancer in China

·      Cancer is the leading cause of death in China and is a major public health problem with incidence increasing

·      It is estimated that there are more than 7,500 cancer deaths per day in China; and there were 4.3 million new cancer cases and more than 2.8 million cancer deaths in China in 2015

Lung cancer in China

·      Lung cancer remains the #1 killer in China of both men and women

·      Over 700,000 new cases of lung cancer diagnosed annually

o  2015: new cases 733,000 - Mortality 610,000

·      Approximately 350 million adults were current smokers in 2015

(Different sources: Chinese Journal of Cancer 2016 and Cancer Statistics in China, 2015)

For further information:

Oncimmune Holdings plc

Geoffrey Hamilton-Fairley, Chief Executive Officer

[e-mail]

Zeus Capital Limited (Nominated Adviser and Joint Broker)

Giles Balleny, Hugh Kingsmill Moore

[phone]

Bryan, Garnier & Co Limited (Joint Broker)

Phil Walker, Dominic Wilson

[phone]

Berenberg (Joint Broker)

Toby Flaux, Charlotte Sutcliffe

[phone]

Media enquiries:

Consilium Strategic Communications

Chris Gardner, Matthew Neal, Lindsey Neville

[e-mail]

[phone]

About Oncimmune

Oncimmune is a leading early cancer detection company developing and commercialising its proprietary EarlyCDT® platform technology. Oncimmune has pioneered the development of autoantibody tests that can detect cancer up to four years earlier than other methods and can be applied to a very wide range of solid tumour types. The Company's first product, EarlyCDT®-Lung, was launched in 2012, as a CLIA test in the USA and since then over 150,000 commercial tests have been sold. EarlyCDT®-Lung is available through physicians in the US and also privately in the UK and other regions. EarlyCDT®-Lung is being used in the largest ever randomised trial for the early detection of lung cancer using biomarkers, the National Health Service (NHS) Scotland ECLS study of 12,210 high-risk smokers. EarlyCDT® tests for liver and ovarian cancer are in development.

Oncimmune, headquartered in Nottingham, United Kingdom with testing facilities in the US, joined AIM in May 2016 under the ticker ONC.L. For more information, visit www.oncimmune.com

About Genostics Co. Ltd

Genostics Co. Ltd is one of the subsidiaries of Gene Group Holding Ltd. (GGH). GGH was founded in 1992 and currently has 18 offices across China and over 650 employees. Subsidiaries includes GeneTech(Shanghai) Co. Ltd., Gene Co. Limited, eBiotrade and Ecotek Co. Ltd.. GGH has approximately 20 years of experience in R&D, manufacturing, marketing and distribution of immunological and molecular diagnostic products in the fields of oncology, pathology, hematology and cytogenetics, GeneTech(Shanghai) Co. Ltd. has a CFDA certified cGMP manufacturing facility and has ISO9001 and ISO 13485 accreditation. GeneTech(Shanghai) Co. Ltd. is focused on developing a range of molecular and companion diagnostic products to use in the precision diagnosis and medicine.

 

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