Quantum Genomics (Alternext - FR0011648971 - ALQGC), a biopharmaceutical company with the mission of developing new therapies for unmet medical needs in the field of cardiovascular diseases, today announced that it has completed a placement and capital increase, including the removal of preferential subscription rights, reserved for a category of beneficiaries.
In this placement, the Company issued 2,191,698 ordinary shares at €3.75 per share, and warrants with a term of 30 months to purchase up to 1,643,774 additional ordinary shares at an exercise price of €4.75 per share.
This €8.2 Million fundraising may be increased to €16.0 Million if all of the share purchase warrants were to be exercised. Its purpose is to support Quantum Genomics' development programs, including the Phase II arterial hypertension study that will be launched in Fall 2017 in the United States.
Called NEW-HOPE, for "Novel Evaluation With QGC001 in Hypertensive Overweight Patients of multiple Ethnic origins", this Phase II study is designed to assess the effectiveness of QGC001 on 250 high-risk hypertensive patients. In response to the recommendations issued by the FDA (Food and Drug Administration), the study will primarily target a population of hypertensive patients with a specific profile known as "Low Renin High Vasopressin" (LRHV), who often have resistant arterial hypertension, which is poorly controlled or not treated by existing medications.
Following this study – the results of which are expected in the first half of 2019 – a Phase III clinical trial may be initiated with QGC001.
Lionel Ségard, Chairman & CEO of Quantum Genomics, says:
"We would like to thank the international specialized investors who contributed to this fundraising for putting their trust in us.
The results of the Phase IIa study on our drug candidate QGC001, presented in mid-June, perfectly met our expectations, confirming its anti-hypertensive effect in humans and its increasing effectiveness in relation to the severity of the hypertension. QGC001 is thus especially well-suited to hypertensive patients with high cardiovascular risk, who represent the largest potential target market, given the current absence of satisfactory treatment options. As a reminder, complicated hypertension affects 1/3 of hypertensive patients and 10% of patients are completely resistant to existing treatments.
With this funding, we will be able to launch a more extensive Phase II clinical trial on a more focused population of patients with severe or resistant hypertension in the United States starting this fall. Following this second clinical trial, QGC001 may be able to pass directly into Phase III, in line with the development plan announced by the company."
Key features of the capital increase
- Type of transaction and type of offering
This transaction is to increase capital by issuing ordinary shares with equity warrants (actions à bons de souscription d'actions/ABSA), each with a share subscription warrant (bons de souscription d'actions / BSA), including the removal of preferential subscription rights, reserved for a category of beneficiaries.
- Legal framework
Using the authorizations granted in Resolution 10 of the Combined Ordinary and Extraordinary General Meeting of June 8, 2017, the Board of Directors on July 25, 2017 decided in principle to proceed with this capital increase, including the removal of preferential subscription rights, on the terms and conditions set out in this press release.
- Subscription price
The news shares subscription price of €3.75 represents a 13.4% discount versus the weighted average price of the last 5 trading days (which is €4.33).
- Number of securities issued and resulting dilution
The transaction involves 2,191,698 new ordinary shares issued at €3.75 per share, resulting in a total dilution of 20.0%. Based on existing capital of 8,745,903 shares prior to the transaction, the capital increase raises the total number of ordinary shares to 10,946,189 shares.
The new shares carry entitlements from January 1, 2017 and are tradable on the Euronext Growth market from July 26, 2017. They are admitted on the same listing line as the existing shares (ISIN: FR0011648971) as soon as they are admitted for trading.
For indicative purpose, the percentage of equity owned by a shareholder with 1.00% of share capital prior to the transaction is 0.80% after the transaction, and 0.69% if all of the share purchase warrants were to be exercised.
- Characteristics of equity warrants
Each new share issued comes with an equity warrant, the total being 2,191,698 equity warrants (BSA).
BSA entitle Holders to subscribe to new Quantum Genomics ordinary shares at a parity of 4 BSAs for 3 shares, at an exercise price of €4.75 per share.
BSA may be exercised at any time until January 26, 2020.
If all BSAs are exercised in full, 1,643,774 new additional ordinary shares will be created (resulting in a maximum dilution, including the new shares issued via capital increase, in the order of 30%) representing a potential €16.0 Million total proceeds from the issuance.
Pursuant to Article L. 228-103 of the French Commercial Code, BSA Holders are grouped into a body with legal personality protecting their joint interests (the “masse”).
General Meetings of BSA Holders are convened to decide any change to the issue contract and any matter that applicable law submits to its authorisation.
They are also convened to decide any matter relating to a merger or demerger of the Company, pursuant to Articles L. 228-65, I, 3, L. 236-13 and L. 236-18 of the French Commercial Code which apply in the same way as Article L. 278-73.
In accordance with applicable legislation, each BSA entitles its Holder to exercise one vote at General Meetings of BSA Holders.
A General Meeting of BSA Holders on first convocation may validly deliberate only if the Holders present or represented comprise at least one quarter of the BSAs with voting rights. A General Meeting of BSA Holders on second convocation may validly deliberate only if the BSA Holders present or represented comprise at least one fifth of the BSAs with voting rights.
Resolutions of General Meetings of BSA Holders are passed by a two-thirds majority of the BSA Holders present or represented.
In accordance with Article L.228-47 of the French Commercial Code, the lead representative of the BSA Holders body will be Aether Financial Services.
The representative of the body, unless otherwise decided by the General Meeting of BSA Holders, will have the power, on behalf of the body of BSA Holders, to sign all documents relating to the defence of the common interests of BSA Holders.
The duties of the representative of the BSA Holders body will be performed in accordance with applicable laws and regulations.
The terms and conditions governing the convocation, meeting, organisation and holding of General Meetings of BSA Holders are those set out in applicable laws and regulations.
The BSA adjustment rules are those generally adopted for this type of transaction.
- Theoretical value of a share subscription warrant (BSA)
The theoretical value of a BSA is €0.66, assuming a volatility of 30%, based on the weighted average share price of the last 20 trading days which is €4.75 (Black & Scholes formula).
- Abstention undertaking by the Company and its corporate officers
As part of the capital increase:
- the Company promises not to issue shares or other transferable securities giving access to capital for a period of 150 days following the settlement/delivery of new shares, subject to the certain exceptions;
- the members of the Board of Directors and the Executive Committee promise not to sell the shares that they hold, for a period of 90 days following the settlement/delivery date of new shares, subject to the certain exceptions.
Maxim Group LLC acted as the placement agent for the United States and Invest Securities for Europe.
ABOUT QUANTUM GENOMICS
Quantum Genomics is a biopharmaceutical company with the mission of developing new therapies for unmet medical needs in the field of cardiovascular diseases, especially hypertension and heart failure.
The Company is developing a new therapeutic approach based on BAPAI (Brain Aminopeptidase A Inhibition). This is the result of more than 20 years of academic research in the laboratories of the Collège de France, INSERM, CNRS and the University of Paris Descartes.
Quantum Genomics is listed on the Alternext market in Paris (ISIN code FR0011648971, Ticker ALQGC).
The Company has offices in Paris, France, and New York, NY, USA. For more information, please visit www.quantum-genomics.com.
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