Re: Fund Raising

RNS Number : 3353X

ReNeuron Group plc

24 June 2008

 



ReNeuron secures £2.5 million financing

Guildford, UK, 24 June 2008: ReNeuron Group plc (LSE: RENE.L) today announces that it has secured £2.5 million of further financing from its principal existing investors by way of a subscription for a series of new Secured Loan Notes constituted by the Company. 

Awal Bank and Merlin Biosciences Fund have today subscribed £0.5 million in cash for Secured Loan Notes and, subject to certain conditions, have agreed to subscribe a further £2 million in cash for Loan Notes over the next five months. 

Michael Hunt, Chief Executive Officer of ReNeuron, said: 

'We are pleased to have secured this interim financing arrangement from our lead investors, and we thank them for their continuing support of ReNeuron and its ambitions. The size and structure of the financing has been arranged to allow these investors to participate in a way that we believe is both minimally dilutive and that provides sufficient funding for us to achieve our principal near term objective of taking our lead ReN001 cell therapy for stroke into the clinic within the next six to nine months.' 

The £2.5 million Secured Loan Notes will be drawn down over the next five months and will be repayable (if not converted) after 3 years. Interest accrues on drawn down Secured Loan Notes at a rate of LIBOR plus 2%. The Loan Notes are convertible into Ordinary Shares at the then prevailing market share price, capped at 8.25p and with appropriate regulatory approval. No conversion is permitted unless, amongst other conditions, the approval of the Panel has been obtained in accordance with the whitewash procedure set out in Appendix 1 to the Takeover Code (save where such conversion would not result in any person being required to make an offer under Rule 9 of the Takeover Code in any event). In addition, Loan Notes may not be subscribed, nor may Loan Notes be converted into Ordinary Shares, if a third party (together with persons acting in concern with him) acquires 50% or more of the issued share capital of the Company. The Loan Notes are secured by the interests of ReNeuron Limited and ReNeuron Inc. in certain selected, non-licensed patents. 

As at 23 June 2008, Merlin Biosciences Fund is interested in 31,080,926 Ordinary Shares in the Company (representing approximately 20.16 per cent. of the issued share capital of the Company) and Awal Bank is interested in 45,890,476 Ordinary Shares in the Company (representing approximately 29.77 per cent. of the issued share capital of the Company). 

The Directors of the Company consider that, having consulted with the Company's nominated adviser, Collins Stewart Limited, the terms of the transaction are fair and reasonable in so far as the Company's shareholders are concerned.

Enquiries:

ReNeuron
Michael Hunt, Chief Executive Officer	Tel: [phone]
Dr John Sinden, Chief Scientific Officer

Financial Dynamics
Europe
David Yates	Tel: [phone]
Lara Mott
US
Robert Stanislaro	Tel : [phone]

Collins Stewart
Tim Mickley	Tel: [phone]

About ReNeuron

ReNeuron is a leading, UK-based stem cell therapy business. It is applying its novel stem cell platform technologies in the development of ground-breaking stem cell therapies to serve significant and unmet or poorly-met clinical needs. 

ReNeuron has used its proprietary, patented cell expansion technology to generate genetically stable neural

stem cell lines. This technology platform has multi-national patent protection and is fully regulated by means of a

chemically-induced safety switch. Cell growth can therefore be completely arrested prior to in vivo implantation.

ReNeuron's clinically-tested cell encapsulation technology provides a method of protecting cells when

transplanted, as well as reducing or eliminating the host immune response that might otherwise occur post-

transplantation.

ReNeuron has filed for approval to commence initial clinical studies with its lead ReN001 stem cell therapy for chronic stroke disability. There are an estimated 50 million stroke survivors worldwide, approximately one half of which are left with permanent disabilities. The annual health and social costs of caring for these patients is estimated to be in excess of £5 billion in the UK and in excess of US$50 billion in the US. In addition to its stroke programme, ReNeuron is developing stem cell therapies for a number of neurodegenerative diseases and other conditions, including Parkinson's disease, Type 1 diabetes and diseases of the retina.

ReNeuron has also leveraged its stem cell technologies into non-therapeutic areas - its ReNcell® range of cell lines for use in research and in drug discovery applications in the pharmaceutical industry. ReNeuron's ReNcell®CX and ReNcell®VM neural cell lines are marketed worldwide under license by Millipore Corporation.

ReNeuron's shares are traded on the London AIM market under the symbol RENE.L. Further information on ReNeuron and its products can be found at www.reneuron.com.

Data sources: UK Stroke Association; American Stroke Association.

About Merlin Biosciences

Merlin Biosciences Limited, part of the Excalibur Group, is a specialised venture investor in life sciences companies and manages three funds (including the Merlin Biosciences Fund), worth in excess of €450 million of equity capital.  Merlin and the funds which it manages invest in companies that are bringing to market human medicines or medical devices with groundbreaking technology and significant commercial potential. 

Since 1997, Merlin and the funds which it manages have participated in the funding of 36 European biotechnology and life science companies on behalf of its investment partnerships.  Leveraging a worldwide, dedicated network of advisers and experienced strategic partners, Merlin has built a reputation for being an exceptional partner for management teams who can create substantial value for investors.

Further information on Merlin Biosciences can be found at www.merlin-biosciences.com. 

About Awal Bank

Awal Bank is a wholesale bank based in Bahrain. Founded by the Saad Group, it was established in 2004 and is licensed by the Central Bank of Bahrain. Awal offers a full range of wholesale banking services including investment banking, corporate and trade finance, Islamic product offerings, commercial lending, acceptance of customer deposits and treasury activities. With capital of US$1 billion, it is now one of the largest banks in Bahrain.

Awal has a significant investment management department, covering international bonds, public and private equity and hedge fund investments. With all asset classes, the emphasis is on quality investments supported by a strategy to hold for the longer term.

Further information on Awal Bank can be found at www.awal-bank.com.

This announcement contains forward-looking statements with respect to the financial condition, results of operations and business achievements/performance of ReNeuron and certain of the plans and objectives of management of ReNeuron with respect thereto. These statements may generally, but not always, be identified by the use of words such as 'should', 'expects', 'estimates', 'believes' or similar expressions. This announcement also contains forward-looking statements attributed to certain third parties relating to their estimates regarding the growth of markets and demand for products. By their nature, forward-looking statements involve risk and uncertainty because they reflect ReNeuron's current expectations and assumptions as to future events and circumstances that may not prove accurate. A number of factors could cause ReNeuron's actual financial condition, results of operations and business achievements/performance to differ materially from the estimates made or implied in such forward-looking statements and, accordingly, reliance should not be placed on such statements.

 

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