4D pharma (AIM: DDDD), a pharmaceutical company focusing on the development of live biotherapeutics, announces that it has today conditionally placed with investors 3,797,469 new ordinary shares (the "Placing Shares"), through Zeus Capital Limited as broker to the Company, at a placing price of 790p per ordinary share to raise approximately £30 million before expenses (the "Placing").
The Placing is being effected within the Company's existing share allotment authorities and is conditional upon, among other things, admission of the Placing Shares to trading on AIM ("Admission"). Admission is the final condition to completion of the Placing.
Application has been made to London Stock Exchange plc for the Placing Shares to be admitted to trading on AIM, and Admission is expected to become effective at 8.00am on 11 December 2015. On Admission, the Placing Shares will represent approximately 5.9% of the issued share capital of the Company, as enlarged by the Placing.
The Placing Shares will, when issued, be credited as fully paid and will rank equally in all respects with the existing ordinary shares of 0.25 pence each in the capital of the Company then in issue, including the right to receive all dividends and other distributions declared, made or paid in respect of such shares after the date of issue of the Placing Shares.
Following Admission, the Company's issued share capital will consist of 64,365,198 ordinary shares. There are no ordinary shares held in treasury. Therefore, in accordance with the FCA's Disclosure and Transparency Rule 5.6.1, the Company confirms that, following Admission, the total number of voting rights in the Company will be 64,365,198.
USE OF PROCEEDS
The Directors intend to use the proceeds of the Placing:
· to accelerate the development of the 2nd generation MicroRx live biotherapeutics into the clinic;
· to further expand and develop the Company's cancer programmes; and
· to identify additional research opportunities and programmes.
The Company is focused on the development of live biotherapeutics, a new and emerging regulated class of therapeutics. The Directors believe that this class could deliver a significant step forward in the healthcare market, by rapidly developing medicines that show improved efficacy and safety profile.
The Company has successfully developed MicroRx, its proprietary platform for the discovery of novel live biotherapeutics, expanding its proprietary strain library to over 2,500 bacteria. MicroRx allows for the rapid screening of the library of bacteria for therapeutic effect. In January 2015 the Company reported that it had identified bacteria that had demonstrated therapeutically relevant effects in pre-clinical models of rheumatoid arthritis, allergic asthma and severe, steroid resistant asthma.
On 10 February 2015 the Company placed 8,475,610 Ordinary Shares, raising £34.75 million before expenses (the "February Placing"), in order to take forward the clinical development of its existing programmes, expand the discovery and development capability of MicroRx, and build in-house development capability.
DEVELOPMENTS SINCE THE FEBRUARY PLACING
In August 2015 the Company commenced a phase 1 clinical trial in respect of Blautix™, its programme for the treatment of irritable bowel syndrome; and in November 2015 the Company obtained regulatory and ethical approval for a phase 1 clinical trial in respect of Thetanix™, its programme for the treatment of Paediatric Crohn's Disease, with the trial expected to commence before the end of 2015.
Throughout the period the Company has further developed the MicroRx platform. Having initially focused on the discovery of potential treatments for autoimmune and inflammatory diseases, MicroRx has been targeted across multiple areas, including CNS and oncology. In June 2015 the Company reported that it had identified bacteria that had demonstrated therapeutically relevant effects in an industry standard model of multiple sclerosis. Then in November 2015 the Company reported that it had identified an orally administered live biotherapeutic candidate that had shown efficacy in pre-clinical models of breast and lung cancers (comparable to checkpoint inhibitors, a market the pharmaceutical industry expects to exceed $25bn in the next decade). The MicroRx platform has to date delivered a proprietary pipeline of 12 programmes, and continues to be targeted at delivering more candidates across multiple disease areas.
CONTINUATION OF STRATEGY
The Company has demonstrated the ability to both rapidly identify candidates and accelerate a development programme to facilitate trials in patients. The Company intends to take more programmes into patient trials and continue to expand its development capabilities. As with the recent cancer work, the Company will also continue to innovate, looking to exploit its proprietary library using the MicroRx platform to discover more novel live biotherapeutics for new disease areas.
RELATED PARTY TRANSACTION
The Placing is considered a Related Party Transaction under Rule 13 of the AIM Rules for Companies, as the following Related Parties (as defined in the AIM Rules for Companies) will be participating in the Placing;
· Invesco Asset Management; and
· Woodford Investment Management.
The Directors consider, having consulted with the Company's nominated adviser Zeus Capital Limited, that the terms of the Related Parties' participation in the Placing are fair and reasonable insofar as the Company's shareholders are concerned.
Commenting on the Placing, Duncan Peyton, CEO of 4D pharma, said: "We are pleased to have raised additional funds, and thank the investors for giving the Company both the confidence and capital to continue its rapid development. Over the last 12 months we have shown the capability not only to take live biotherapeutics into patients, but the ability to rapidly identify and develop new therapeutics that are ready for testing in patients across new disease areas in an incredibly short period of time. Over the next 12 months we again look to further advance live biotherapeutics and continue to build on our class leading platform."