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PledPharma carries out a fully guaranteed rights issue of approximately SEK 200 million in connection with the acquisition of Rare Thyroid Therapeutics

October 5, 2020

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In conjunction with the acquisition of Rare Thyroid Therapeutics International AB (“RTT”) announced in a separate press release earlier today, the Board of Directors of PledPharma AB (publ) (“PledPharma” or the “Company”) has today decided to carry out a share issue with preferential rights for the Company’s existing shareholders (the “Rights Issue”). The Rights Issue will provide the Company with approximately SEK 200 million before transaction costs relating to the Rights Issue. The subscription price is 5.25 SEK, which corresponds to a premium of 2.5 percent compared to the closing price of 5.12 SEK for the PledPharma share on 2 October 2020. The Rights Issue is fully guaranteed through subscription undertakings and underwriting commitments. The Company’s three largest shareholders the Fourth Swedish National Pension Fund, Nortal Investments AB (Staffan Persson) and Cidro Förvaltning AB (Peter Lindell) as well as the Company’s Chairman Håkan Åström and CEO Nicklas Westerholm have committed to subscribe their pro rata shares in the Rights Issue. In addition, PledPharma has also received underwriting commitments from the Fourth Swedish National Pension Fund, Cidro Förvaltning AB (Peter Lindell), Håkan Åström and NYIP (Nyenburgh Holding BV). The Board of Directors has further proposed to be authorised to resolve on an over-allotment option for up to SEK 50 million (the “Over-allotment option”), which may be exercised if the Rights Issue is over-subscribed.

The Rights Issue and the Over-allotment option are subject to approval by an extraordinary general meeting to be held on 28 October 2020. Notice to the extraordinary general meeting will be published today through a separate press release.

Summary of the Rights Issue
·       The Rights Issue comprises a maximum of 38,238,085 shares. The Rights Issue will provide the Company with approximately SEK 200 million before deduction of costs related to the Rights Issue.
·       The subscription price is SEK 5.25, which corresponds to a premium of 2.5 percent compared to the closing price of 5.12 SEK for the PledPharma share on 2 October 2020. Brokerage fees will not be charged.
·       Record date for determining which shareholders are entitled to subscription rights shall be 2 November 2020. Last day of trading in the Company’s share including the right to receive subscription rights in the Rights Issue is 29 October 2020. First day of trading in the Company’s share excluding the right to receive subscription rights in the Rights Issue is 30 October 2020.
·       Each share held as of the record date gives one (1) subscription right. Seven (7) subscription rights entitles the holder to subscribe for five (5) new shares.
·       Trading of subscription rights will be possible during the period 9 November to 19 November 2020.
·       The subscription period is 9 November to 23 November 2020. The Board of Directors shall have the right to extend the subscription period and the last day of payment.
·       The Rights Issue is fully guaranteed through subscription undertakings and underwriting commitments. The Company’s three largest shareholders the Fourth Swedish National Pension Fund, Nortal Investments AB (Staffan Persson) and Cidro Förvaltning AB (Peter Lindell) as well as the Company’s Chairman Håkan Åström and CEO Nicklas Westerholm have committed to subscribe their pro rata shares in the Rights Issue corresponding to an amount of approximately SEK 64 million, or approximately 32 percent of the Rights Issue, and committed to vote in favour of the Rights Issue at the extraordinary general meeting. In addition, PledPharma has underwriting commitments from the Fourth Swedish National Pension Fund, Cidro Förvaltning AB (Peter Lindell), Håkan Åström and NYIP (Nyenburgh Holding BV), corresponding to approximately SEK 136 million, or approximately 68 percent of the Rights Issue.
·       The Board of Directors has proposed to be authorised to decide on an Over-allotment option of maximum SEK 50 million in the case of an oversubscription of the Rights Issue.
·       The purpose of the Rights Issue is to secure a continued and successful development of RTT’s orphan drug candidate Emcitate® and PledPharma’s orphan drug candidate Aladote®.
·       The decision and proposal of the Board of Directors can be viewed in full in the notice of the extraordinary general meeting, which will be published today.

Background and rational summarised
PledPharma is a pharmaceutical drug development company with focus on improving treatments for severe diseases with substantial unmet medical need where alternative treatments does not exist. PledPharma has announced, in a press release published earlier today, its intention to acquire Rare Thyroid Therapeutics International AB (“RTT”), with its drug candidate Emcitate®. PledPharma intends through the acquisition to create a new company with the strategic focus on late stage development and commercialisation of orphan drugs. The new combined entity is under name change to Egetis Therapeutics AB.

The purpose of the Rights Issue is to secure a continued and successful development of RTT’s orphan drug candidate  Emcitate® and PledPharma’s orphan drug candidate Aladote®. 

PledPharma intends to use the net proceeds of approximately SEK 200 million to finance (i) the development of orphan drug candidates Emcitate® and Aladote® to marketing approval in Europe and USA (approximately 60 percent); (ii) initial commercial preparations (approximately 20 percent); and (iii) general corporate purposes and financial flexibility (approximately 20 percent). In order to meet potential demand from strategic investors and thereby broadening the shareholder base of PledPharma, the Board of Directors has further proposed to be authorised to decide on an Over-allotment option of approximately SEK 50 million, with deviation from the shareholders’ preferential rights. Through the Rights Issue and the Over-allotment option, if exercised in full, the Company will receive net proceeds of approximately SEK 250 million prior to issue costs. Proceeds from the Over-allotment option will be used for day-to-day operations and enable a higher degree of financial flexibility in the activities described above. Utilisation of the potential Over-allotment option is conditioned on the Rights Issue being oversubscribed.

Terms and additional information about the Rights Issue and the Over-allotment option
The proposed terms for the Rights Issue implies that one (1) subscription right is received for each (1) share held at the record date 2 November 2020. Seven (7) subscription rights entitles the right to subscribe for five (5) new shares. The subscription price per share has been set to SEK 5.25, which corresponds to a premium of 2.5 percent compared to the closing price of SEK 5.12 for the PledPharma share on 2 October 2020.

A total of maximum 38,238,085 shares will be issued in the Rights Issue, generating proceeds of approximately SEK 200 million excluding transaction costs relating to the Rights Issue.

The record date for determining which shareholders are entitled to subscription rights shall be 2 November 2020. The subscription period will run from 9 November 2020 up until 23 November 2020, with a right for the Company to extend the subscription period. Subscription of new shares without the support of subscription rights shall be possible during the same time period.

In the event that not all shares are subscribed for through exercise of subscription rights, the Board of Directors shall, limited by the maximum proceeds from the Rights Issue, decide on allocation of shares without the exercise of subscription rights. Such shares shall be allocated as follows: (i) firstly to those who have subscribed for shares through the exercise of subscription rights, regardless of the subscriber being a shareholder as of the record date or not, pro rata in relation to the number of subscription rights each and every one has utilised for subscription, (ii) secondly to others who have indicated interest in subscribing for shares without the use of subscription rights, pro rata in relation to their indicated interest and (iii) thirdly go to those who have provided underwriting commitments in proportion to the respective underwriting commitment.

Trading in interim shares (BTA) shall take place on Nasdaq Stockholm from 9 November 2020 up until the Rights Issue and BTA has been registered with the Swedish Companies Registration Office (Sw. “Bolagsverket”) and interim shares are converted to common shares.

In order to enable a possible oversubscription and the possibility of providing the Company with more capital and broaden its shareholder base, the Board of Directors has proposed to be authorised to decide on an Over-allotment option of SEK 50 million, which can be exercised if the Rights Issue is oversubscribed.

Complete terms and conditions for the Rights Issue and the Over-allotment option, information regarding subscription undertakings and underwriting commitments as well as other information about the Company will be presented in the prospectus, which will be published the day before the subscription period commences at the latest.

Preliminary timeline for the Rights Issue:
·       28 October 2020: Extraordinary general meeting
·       29 October 2020: Last day of trading in the share with right to participate in the Rights Issue
·       30 October 2020: First day of trading excluding subscription right
·       2 November 2020: Record date for participation in the Rights Issue, i.e. shareholders registered in the shareholder register on this day will receive subscription rights
·       9 – 19 November 2020: Trading with subscription rights
·       9 – 23 November 2020: Subscription period
·       26 November 2020: Estimated date of publishing outcome of the Rights Issue and possible exercise of the Over-allotment option

Shares and share capital
Upon closing of the acquisition of RTT, the Company shall, according to the share purchase agreement, pay SEK 60 million cash, funded from own cash-in-hand, and issue 63,773,345 new shares to the sellers (the “Consideration Shares”), as announced in a separate press release earlier today. Following the issue of Consideration Shares, the Company’s share capital will increase by SEK 3,356,493 to SEK 6,174,037. Following the issue of the Consideration Shares, the number of shares will amount to 117,306,666. The Consideration Shares do not entail the right to participate in the Rights Issue.

With the Rights Issue, a total number of 38,238,085 shares will be issued at a subscription price of SEK 5.25 per share and therefore provide the company with proceeds of approximately SEK 200 million before transaction costs relating to the Rights Issue. The Company’s share capital based on the number of shares including the Consideration Shares will increase with a maximum of approximately SEK 2,012,532 to a total of approximately SEK 8,186,569 and the number of shares will increase with a maximum of 38,238,085 shares to a total of 155,544,751 shares. Dilution for the shareholders not participating in the Rights Issue will be maximum 25 percent based on the currently outstanding number of shares including the Consideration Shares.

If the Over-allotment option is exercised, the share capital will increase with an additional maximum of SEK 501,253 and the number of shares will increase with a maximum of 9,523,809 new shares.

In the case that both the Rights Issue and the Over-allotment option are exercised in full, the Company’s share capital will increase by SEK 2,513,785 to a total of SEK 8,687,822, and the number of shares will increase from 47,761,894 shares to total of 165,068,560 shares based on the currently outstanding number of shares including the Consideration Shares. The dilution will be a maximum of 29 percent based on the number of shares including the Consideration Shares.

Subscription undertakings and underwriting commitments
The Rights Issue is fully guaranteed through subscription undertakings and underwriting commitments. The Company’s three largest shareholders the Fourth Swedish National Pension Fund, Nortal Investments AB (Staffan Persson) and Cidro Förvaltning AB (Peter Lindell) as well as the Company’s Chairman Håkan Åström and CEO Nicklas Westerholm have committed to subscribe their pro rata shares in the Rights Issue, corresponding to an amount of approximately SEK 64 million, or approximately 32 percent of the Rights Issue and committed to vote in favour of the Rights Issue at the extraordinary general meeting.

In addition, PledPharma has underwriting commitments from Fourth Swedish National Pension Fund (AP4), Cidro Förvaltning AB (Peter Lindell), Håkan Åström and NYIP (Nyenburgh Holding BV), corresponding to approximately SEK 136 million, or approximately 68 percent of the Rights Issue.

Lock-up undertakings
In connection with the Rights Issue, the members of the Board of Directors of the Company and management representatives, have undertaken not to sell any current shares in the Company for a period of 180 calendar days following the date of the announcement of the outcome of the Rights Issue, with customary exceptions.

Extraordinary general meeting
An extraordinary general meeting will be held 28 October 2020 for the approval of the Board of Directors proposal on the Rights Issue and to authorise the Board of Directors to decide on an Over-allotment option. The notice of the extraordinary general meeting will be published through a separate press release later today.

Intention to change the Company’s name to Egetis Therapeutics AB
Conditioned upon closing of the RTT transaction and completion of the Rights Issue, the Board of Directors intends to summon an extraordinary general meeting to be held in the later part of the fourth quarter 2020 to decide on changing the Company’s name from PledPharma AB to Egetis Therapeutics AB by changing the Company’s articles of association.

Web conference for investors and analysts
PledPharma invites to a web conference 5 October 2020 at 10:00 CET. To join the web conference, please click on the following link:
Link – https://tv.streamfabriken.com/2020-10-05-press-conference
SE: +46850558352,  UK: +443333009032,  US: +18332498404

Financial and legal advisors
ABG Sundal Collier and Pareto Securities act as Joint Bookrunners for the Rights Issue and the potential Over-allotment option. Advokatfirman Lindahl is the legal advisor to PledPharma and Baker McKenzie is the legal advisor to the Joint Bookrunners.

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Address: Grev Turegatan 11 C, 114 46 Stockholm, Sweden

Phone: +46 8 679 72 10

E-mail: info@pledpharma.com