RNS Number : 8375Q
Xenetic Biosciences PLC
26 October 2011
26 October 2011
Xenetic Biosciences plc ('Xenetic Bio' or the 'Company')
First Closing Update
Xenetic Bio (AIM: XEN.L), the bio-pharmaceutical company specialising in the development of high-value differentiated biologic drugs and vaccines, announces the initiation of the process for First Closing of the Proposals set out in the Shareholder Circular of 4 August 2011 (the "Circular"), and as approved by shareholders at the Company's General Meeting held on 2 September 2011. Defined terms in this announcement shall have the meanings given to them in the Circular unless the context requires otherwise.
While regulatory processes in both Germany and Russia - including as they relate to asset transfers, valuation and registration - have proved to take longer than first envisaged, the parties have commenced the process of First Closing (namely completion of the Subscription Agreement ("the SA") with SynBio LLC ("SynBio") in Russia and the Acquisition Agreement ("the AA") under which the Company is to acquire the entire equity capital of SymbioTec GmbH). The first stage in effecting First Closing has been initiated by the transfer to SynBio of 34, 000,000 Xenetic Ordinary Shares formerly held by FDS Pharma.
This transfer of the 34,000,000 Xenetic Ordinary Shares to SynBio is a transfer which must be appropriately registered with the relevant authorities in the Russian Federation, after completion of which registration process Rusnano will inject the cash funding into SynBio that will enable SynBio to complete the SA by subscribing for 110,800,000 Xenetic New Ordinary Shares at 11 pence per share under the Placing to raise £12.188 million before expenses. It is anticipated that this registration process will complete such that the target date for completion of the SA is expected to be 25th November 2011. However, it should be stressed that achieving this date is dependent on the speed with which the registration process can be effected in Russia and so, while all parties will continue to apply best efforts, such outcome cannot be certain.
It is intended that completion of the AA will occur on or around that same date as completion of the SA and Placing. However provision has been made to allow for the German share transfer registration process and certain pre-completion steps, such that completion of the AA can take place by 15th December 2011 at the latest.
Completion of the SA and AA will represent the achievement of First Closing, at which time the Company will proceed to conclude the arrangements with Serum Institute of India and announce its intentions with regard to the proposed Open Offer.
Further announcements will be made in due course.
Commenting on this process, M. Scott Maguire, CEO of the Company, said:
"The Xenetic Board is delighted to see this series of transformational deals reach its final stages. The transactions involved in what is a complex set of deals spell a new beginning for the Company as they enable us to implement our strategy of de-risking biotech. With the new Co-Development Agreement with SynBio, we will have 12 drug candidates in various stages of development in Russia and India via licenses. The data generated by our partners will give human proof of concept on the drug candidates' merits as a therapy, thus taking a large element of the risk out of drug development and allowing us to decide which drug candidates have a good chance of success before we allocate our newly acquired cash resources to US and European clinical trials. A further step in our de-risking process involves reformulating successful marketed drugs with our naturally-occurring, patent-protected platform technologies and creating next generation versions of these successful drugs. With these de-risking approaches to drug development, we look forward with confidence to a new commercialisation phase as a specialty drug developer able to accelerate the creation of shareholder value."
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