Convertible Loan Facility of up to £4.0 million

RNS Number : 6702S

ValiRx PLC

21 March 2016

 

ValiRx Plc

("ValiRx" or the "Company")

Convertible Loan Facility of up to £4.0 million and Issue of Warrants to enable expansion of the VAL201 trial to a multi-centre study

London, UK. 21^st March 2016: ValiRx Plc (AIM: VAL), a life science company with a focus on cancer diagnostics and therapeutics for personalised medicine, is pleased to announce that it has entered into an agreement with Bracknor Fund Ltd ("Bracknor"), a private mutual fund incorporated in the British Virgin Islands ("BVI"), pursuant to which Bracknor has agreed to subscribe for convertible loan notes with an aggregate principal amount of up to £4 million ("CLNs"). As part of the agreement, the Company has agreed to issue warrants to Bracknor  ("CLN Warrants"). Further details of the CLNs and the CLN Warrants are set out below.

Convertible Loan Note Facility

Subject to certain conditions, Bracknor has agreed to subscribe for the CLNs in eight equal tranches of £0.5 million each ("Tranche"). The Company intends to issue the Initial Tranche shortly and then has the exclusive option to require Bracknor to subscribe for up to seven Tranches of £0.5 million at any time after the earlier of (i) 60 days after the issue of the previous Tranche (unless extended in accordance with terms set out in the agreement) and (ii) the date on which all existing issued CLNs have been converted into ordinary shares in the Company (together the "Trigger Events") provided that the Company gives notice to Bracknor requiring it to subscribe for a further Tranche within 30 trading days of a Trigger Event occurring.

Each Tranche is convertible into ordinary shares of the Company (at the election of Bracknor) at the price equivalent to 90% of the lowest volume weighted average price of the Company's ordinary shares in the 15 trading days immediately preceding the date of conversion, subject to a floor price of (i) in respect of the initial tranche 37.5% of the lowest average share price in the 15 trading days immediately preceding the initial tranche issue date and (ii) in respect of the subsequent tranches at a rate of 30% of the lowest average trading price in the 15 trading days immediately prior to the relevant issue date. . The CLNs shall mature on the third anniversary of the issue of the Initial Tranche at which point any outstanding issued CLNs will be converted into ordinary shares. No interest is payable on the CLNs. An arrangement fee equating to 5% is payable by the Company to Bracknor.

A further announcement will be made when the Initial Tranche is drawn down.

Issue of Warrants

The Company has agreed to issue CLN Warrants such that, at the point of any conversion of CLNs ("Conversion"), the Company shall issue CLN Warrants to Bracknor at a rate of 115% of the number of shares to be issued pursuant to the corresponding Conversion.  The CLN Warrants shall be exercisable at any time prior to the fifth anniversary of the date of their issue.

Use of proceeds

The proceeds of this facility enables ValiRx to expand the VAL201 clinical trial, currently being conducted at UCLH, to a multi-centre study, which also includes patients with other solid tumours.

Satu Vainikka, Chief Executive Officer of ValiRx, commented: "We are excited to announce this new facility which enables the acceleration and expansion of our clinical trial programmes.  We look forward to updating the market in due course."

Pierre Vannineuse, CEO of Bracknor Capital Ltd and Fund Manager of the Bracknor Fund Ltd, commented: "We are happy to welcome into our fund this biotechnology specialist in innovative precision medicine for oncological applications. Bracknor is confident that ValiRx's management will leverage effectively the funds we provide, to create value for the Company's shareholders in further consolidating and developing its current pipeline".

"I believe this long term funding partnership will sustain the clinical trials currently being conducted for VAL201 and VAL401, respectively targeting prostate and lung cancer, as well as supporting the development of the Company's NAV3 biomarker applications and the broader development of ValiRx's proprietary GeneICE technology."

Aboudi Gassam, Chairman & President of the Investment Committee at BRACKNOR and VP Business Development of the MS Group, commented: "Bracknor is proud to close its first listed transaction in the UK with ValiRx. This first transaction reflects a shift in our investment strategy and the strengthening of our engagement toward Biotech and Medtech companies with high unrealised potential."

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For more information, please contact:

ValiRx plc	Tel: [phone] www.valirx.com
Dr Satu Vainikka, Chief Executive	Tel: [phone]
Tarquin Edwards, Head of Communications.	Tel: [phone] [e-mail]
Mark Treharne, Corporate Development Manager	Tel: [phone] [e-mail]
Cairn Financial Advisers LLP (Nominated Adviser)	Tel: [phone]
Liam Murray / Avi Robinson
Northland Capital Partners Limited (Broker)	Tel: [phone]
Patrick Claridge / David Hignell (Corporate Finance) John Howes / Abigail Wayne (Broking)

Notes for Editors

About the Bracknor Investment Group (www.bracknor.com)

Bracknor Capital Ltd is the Investment Manager platform of the Private Mutual Fund, Bracknor Fund Ltd. Bracknor's mandate is to invest globally in SMEs that it believes enjoy unique competitive advantages and genuine potential and to provide those enterprises with the necessary working capital or growth capital needed, to both ignite and sustain their growth.

Bracknor, through its Chairman, Mr Aboudi Gassam, is backed by the Saudi Arabian Group, MS Group (a $2bn multi-diversified industrial group)(www.mscc.com.sa) - which seeks to activate and exploit inter-investment portfolio synergies so as to deliver development opportunities to Bracknor's portfolio companies particularly in the Gulf Club Countries ("GCC") Region.

ValiRx Plc

ValiRx Plc is a biopharmaceutical company developing novel technologies and products in oncology therapeutics and diagnostics. The product focus is in the epigenomic analysis and treatment of cancer, but the technologies can be applied to other fields as well, such as neurology and inflammatory diseases.

The Company has undertaken to develop a novel and groundbreaking class of therapeutics across a number of fields in oncology and has taken its lead compound, Val201, into Phase I/II clinical trials.   The Company listed on the Alternative Investment Market ("AIM") of the London Stock Exchange in October 2006.

The Company has a pipeline of other therapeutic drugs, which are currently progressing towards clinical trials. The product focus is in the targeted analysis and treatment of cancer, but the technologies can be applied to other fields as well, such as neurology and inflammatory diseases.

It actively manages projects within its portfolio as a trading company.  The ValiRx business model spreads the risks of life science technology development by minimising financial exposure and running a set of projects to defined commercial endpoints. This maximises returns to shareholders by adding value at the earlier stages where value increases per investment unit are the greatest.

The Company operates through the following divisional companies:

1. ValiPharma is the therapeutics division, with two embedded technologies primarily directed at the treatment of cancers.

2. ValiFinn is the biomarkers and diagnostic development division. ValiRx acquired through its ValiFinn subsidiary, the complimentary TRAC technology later in the year to strengthen the portfolio.

3. ValiSeek is a joint venture between ValiRx and Tangent Ltd to develop Val401 in lung cancer and potentially other indications.

 

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