This announcement contains inside information as stipulated under the UK version of the Market Abuse Regulation No 596/2014 which is part of English Law by virtue of the European (Withdrawal) Act 2018, as amended. On publication of this announcement via a Regulatory Information Service, this information is considered to be in the public domain.

Press Release

24 August 2023

Ashington Innovation plc

("Ashington" or "the Company") 

Heads of Terms Signed for the Acquisition of Calon Cardio-Technology Limited, subject to the

Completion of the Reverse Takeover of Cell Therapy Limited

Ashington Innovation plc (LSE: ASHI; FSE: 6FW), a special purpose acquisition company, is pleased to announce it has entered into a non-binding heads of terms agreement with Calon Cardio-Technology Limited ("Calon"), to acquire 100% of the outstanding shares in Calon in an all-share transaction. The acquisition is subject to the completion of the proposed reverse takeover of Cell Therapy Limited ("CTL") announced on 19th August 2023 as well as customary legal, financial, and other due diligence for a transaction of this type and entry into a legally binding sale and purchase agreement (the "Proposed Acquisition"). As no binding agreement has yet been reached, the Company cannot guarantee that the Proposed Acquisition will complete.

About Calon

Calon is a UK medical device company developing a Left Ventricular Assist Device (LVAD), an implantable heart pump for patients with severe heart failure. Calon's proprietary LVAD is registered under the trademark Mini-VAD™.

The Mini-VAD™ has demonstrated during in vitro studies a significant reduction in blood damage compared to current LVADs. Calon manufactures its Mini-VAD™ at its state-of-the-art R&D and manufacturing facility in Wales and its technology is protected by a suite of patents and patent applications. Calon has been awarded multiple awards and non-dilutive funding grants, including being selected for the UK Government's Global Incubator Programme. Over its lifetime it has raised over £20m in equity and grant funding.

Background to the Proposed Acquisition

Ashington was formed as a special purpose acquisition company with the intention of acquiring businesses operating in the technology sector as outlined in its prospectus published on 2 June 2023 (the "Prospectus"), which can be found on the Company's website:

https://www.ashingtoninnovationplc.com/wp-content/uploads/2023/06/Ashington-Innovation-PLC-final-prospectus26.pdf.

On 17 August 2023, Ashington announced it had signed a non-binding heads of terms agreement to acquire Cell Therapy Limited, trading as Celixir, via reverse takeover, which led to the suspension of its shares pending completion of the transaction. The addition of Calon dovetails with the proposed Cell Therapy acquisition and demonstrates the Company's broader strategy to form a material regenerative medicine company in the UK that addresses the sizeable heart failure market.

Calon's LVAD technology is highly complementary with the cell therapies developed by 2007 Nobel prize winner and CTL co-founder Professor Sir Martin Evans, which target heart failure. CTL's development expertise in completing pre-clinical studies, securing FDA IND and clinical trial approvals in the UK and Europe, GMP manufacturing approvals and executing clinical trials will be leveraged across the group including development of a new therapy that combines its lead cell therapy, HeartCel™ with Mini-VAD™ implantation.

The enlarged group will be led by Executive Chairman, Dr Darrin M Disley OBE, an experienced private/public company CEO and Director and a successful and highly regarded biotech entrepreneur. Prof. Sir Martin Evans will serve as the Group's Chief Scientist and eminent heart surgeon and founder of Calon, Prof. Steve Westaby, will serve as Chief Medical Officer.

The Proposed Acquisition

Following recent discussions, on 23 August 2023 Ashington entered a non-binding heads of terms agreement with Calon for the acquisition of 100% of the issued share capital of Calon for a purchase price of £39 million, to be satisfied by the allotment and issue of new ordinary shares in Ashington Innovation PLC to the shareholders of Calon.

On completion of the Proposed Acquisition, it is Ashington's intention to seek admission of its enlarged ordinary share capital and related financing, to the Standard Segment of the Official List of the Financial Conduct Authority ("FCA") and to trading on the Main Market of the London Stock Exchange (together, "Admission").

The Proposed Acquisition is subject, inter alia, to:

To effect Admission, obtain the Rule 9 Waiver and to convene the General Meeting, the Company is required to publish a prospectus, to be approved by the FCA, which will include relevant details relating to the Company, CTL, Calon and the Proposed Acquisition, amongst other things.

Jason Smart, Founder of Ashington Innovation, commented: "We are delighted to be able to announce our broader strategy namely, to create a material regenerative medicine group by combining some of the most innovative British companies. The biotech and MedTech sectors present compelling opportunities to create value for shareholders and the Proposed Acquisition of CTL and Calon represent high-quality targets with experienced and expert leadership teams.

"CTL aligns with Ashington's stated IPO objective to acquire a firm with a technology nexus, global intellectual property protection and a business plan built on delivering defined clinical development milestones that represent meaningful value inflections to shareholders.

"The addition of Calon adds significant synergy in developing next generation therapies that address unmet needs in highly attractive cardiac healthcare market and augments the position of the enlarged company for sustainable value accretion. We look forward to supporting CTL and Calon with their mission to develop high innovative first-in-class therapies."

Dr Darrin Disley, Chairman of Celixir Limited, commented: "We are delighted to partner with Ashington to form a material clinical stage regenerative medicine company. In 2020, we made the strategic decision to streamline the business to focus all of our resources on developing our pre-clinical and clinical pipeline of cell therapies that address heart failure. This was implemented quietly without any public announcements while keeping our shareholders informed with a confidential quarterly update. During this stealth period, key pre-clinical and clinical development milestones were met as well as patents granted for our lead cell therapy in the US, EU, and Asia and the entering of a £100M PIPE funding agreement that can be accessed on the listing of our shares. The company has created significant momentum for the business going into the Proposed Transaction with Ashington including in 2022 the dosing of the first cohort of patients in our randomised Heart failure clinical trial and completing pre-clinical development of two follow-on cardiac cell therapies, generating in vivo efficacy and safety data both in-house and with our Big Pharma partner.

"The addition of Calon is highly compatible with our mission to develop first-in-class regenerative cell therapies in areas of high unmet medical need like heart failure and we look forward to working with the Calon team to accelerate the cell + pump combination therapy.

"It is now the correct time to access the public markets building on the results that have already been achieved by CTL and Calon and the tremendous potential of our portfolio of regenerative medicines, Mini-VAD™ and the combination therapy moving forward. We look forward to providing more details on the Company's strategy and market potential in due course."

Professor Steve Westaby, Founder and Director of Calon, commented: "Over 60 million patients suffer from heart failure. Heart transplantation is not a reliable and resilient treatment plan in the long-term; the availability of donor hearts is insufficient, coupled with anti-rejection complications including cancer. The Calon design has resulted in a smaller and lighter LVAD with blood damage performance a factor of 2.2X better than competitors in in vitro studies and the systems enhanced performance has been confirmed in validated in vivo models of heart failure.

"The development of LVADs, cell therapies and combination therapy have enormous potential to improve the lives of the many millions of patients with cardiomyopathy and so, we are delighted to joining Ashington and CTL into accelerating the development of these lifesaving treatments for patients in heart failure"

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About Ashington Innovation plc

Ashington Innovation PLC is a special purpose acquisition company (SPAC), formed with the intention of acquiring businesses operating in the technology sector.

The Company believes that in the increasingly fast-changing global environment there will be an abundance of opportunities to acquire existing businesses in the technology sector, and in particular businesses that possess and utilise proprietary technologies and own applicable intellectual property.

The Company is not limited to any specific geographic region in identifying its target companies.

www.ashingtoninnovationplc.com