Placing, Subscription and Offer

For immediate release

16 February 2015

 

 

ANGLE plc

("ANGLE" or "the Company")

 

PLACING AND SUBSCRIPTION TO RAISE £7.3 MILLION

AND OFFER TO SHAREHOLDERS TO RAISE UP TO £1.5 MILLION

 

ANGLE plc (AIM: AGL and OTCQX: ANPCY), the specialist medtech company, is pleased to announce a Placing of 10,272,587 New Ordinary Shares (the "Placing") and Subscription of 901,000 New Ordinary Shares (the "Subscription") to raise gross proceeds of £7.3 million at a price of 65 pence per Ordinary Share (the "Issue Price"). The Company also announces an Offer of up to 2,307,692 New Ordinary Shares (the "Offer") to certain existing shareholders to raise up to a further £1.5 million.

 

Highlights

 

·     £7.3 million raised through Placing and Subscription with new and existing shareholders

 

·     Up to an additional £1.5 million to be raised through an Offer to qualifying participants

 

·     The net proceeds of the Placing and the Subscription of approximately £6.7 million will  be used for the following purposes:

-  Progress first clinical application in ovarian cancer following the Medical University of Vienna patient study reporting that the Parsortix system delivers "unprecedented sensitivity and specificity" in ovarian cancer;

-  Ongoing key opinion leader relationships including the new MD Anderson collaboration to investigate the use of Parsortix as a companion diagnostic in colorectal cancer announced today (see separate announcement);

-  Develop sales for research use to support drug trials and other research to generate commercial traction and provide companion diagnostic clinical opportunities; and

-  General working capital purposes and strengthening of the balance sheet.

 

The Placing was widely supported with thirteen institutions investing and six private client brokers.  The Company believes that the new investor base provides a strong platform from which to realise the exceptional business potential that the Parsortix system offers. 

 

The net proceeds of the Offer, if any, shall be applied to some of the Company's discretionary programmes and it is expected that this will assist in acceleration of certain aspects of the Company's operations.

 

Unless otherwise defined, capitalised terms shall have the same meaning as defined in the circular being posted to Shareholders today (the "Circular"), which will be available to view on the Company's website at www.angleplc.com.  

 

 

ANGLE's Founder and Chief Executive, Andrew Newland, commented:

"In our announcement on 27 January 2015, we stated that we would be focusing our resources to deliver the ovarian cancer opportunity as quickly as possible.  We are delighted that investors share our view of this opportunity and we have been able to secure the funding so quickly.  The Company is now fully-funded to deliver a clinical application addressing a very strong medical need in ovarian cancer in a market that we estimate may be worth £300 million per annum.

 

"We are grateful for the support we have received from new and existing investors in this fundraising, which was significantly over-subscribed.  Recognising the loyalty and longstanding support of our existing shareholders, we are delighted to be able to offer them the opportunity to invest under the Offer on the same terms as the Placing and Subscription.  Subject to individual investor status, the Offer qualifies for EIS and VCT investment.  The funds raised under the Offer will provide the Company with a strengthened position in developing future commercial collaborations."

 

 

 

For further information:

 

ANGLE plc	01483 685830
Andrew Newland, Chief Executive Ian Griffiths, Finance Director
Cenkos Securities Stephen Keys, Dr Christopher Golden (Nominated adviser) Russell Kerr, Oliver Baxendale (Sales)	020 7397 8900
Buchanan Mark Court, Sophie Cowles, Jane Glover	020 7466 5000

 

 

For Frequently Used Terms, please see the Company's website on http://www.angleplc.com/the-parsortix-system/glossary/

 

 

PLACING AND SUBSCRIPTION TO RAISE £7.3 MILLION

AND OFFER TO SHAREHOLDERS TO RAISE UP TO £1.5 MILLION

 

Introduction

 

The Company is pleased to announce that it proposes to raise £7.3 million (before expenses) by way of a Placing and Subscription, through Cenkos, nominated adviser and broker to the Placing and Subscription, with new and existing investors. The Company has allotted (conditional on Admission) 10,272,587 Placing Shares and 901,000 Subscription Shares and application has been made for the aggregate 11,173,587 New Ordinary Shares to be admitted to trading on AIM which is expected to occur at 8.00 am on 19 February 2015. 

 

The Board considers it important to allow existing Shareholders to participate on the same terms as investors who participated under the Placing or Subscription and to that end, the Company is providing Qualifying Participants the opportunity to subscribe under the Offer.  In connection with the Offer the Company will allot (conditional on Admission) up to 2,307,692 New Ordinary Shares and will make an announcement in due course once the total number of Offer Shares subscribed is known and application will be made for such Offer Shares to be admitted to trading on AIM, which is expected to occur at 8.00 am on 10 March 2015. The Offer is capped at £1.5 million and should (subject to the individual circumstances of investors) be eligible for tax relief under EIS/VCT schemes.

 

The net proceeds of the Placing and the Subscription of approximately £6.7 million will be used for the following purposes:

 

·      Progress first clinical application in ovarian cancer following the Medical University of Vienna patient study reporting that the Parsortix system delivers "unprecedented sensitivity and specificity" in ovarian cancer;

 

·      Ongoing key opinion leader relationships including the new MD Anderson collaboration to investigate the use of Parsortix as a companion diagnostic in colorectal cancer announced today (see separate announcement);

 

·      Develop sales for research use to support drug trials and other research to generate commercial traction and provide companion diagnostic clinical opportunities; and

 

·      General working capital purposes and strengthening of the balance sheet.

 

The net proceeds of the Offer, if any, shall be applied to some of the Company's discretionary programmes and it is expected that this will assist in acceleration of certain aspects of the Company's operations.

 

Background and history of the Company

 

ANGLE is a specialist medtech company commercialising a platform technology that can capture cells circulating in blood, such as cancer cells, even when they are as rare in number as one cell in one billion blood cells, and harvest the cells for analysis.

 

ANGLE's cell separation technology, known as the Parsortix system, harvests the cells of interest through a liquid biopsy, with the patient only subjected to a simple blood test. Parsortix is the subject of two granted US patents and three extensive families of patents being progressed worldwide. The system is based on a microfluidic device that captures cells based on a combination of their size and compressibility. The Parsortix system is established with strong positive evaluations from leading cancer research centres and is working with these cancer centres to demonstrate key clinical applications. Parsortix has a CE Mark for clinical use in Europe and FDA authorisation is in the process of being obtained for the US.

 

The analysis of the cells that can be harvested from patient blood with the Company's Parsortix system has the potential to help deliver personalised cancer care offering profound improvements in clinical and health economic outcomes in the treatment and diagnosis of various forms of cancer.

 

The Parsortix system is designed to be compatible with existing major medtech analytical platforms and to act as a companion diagnostic for major pharmaceutical companies  in helping to identify patients that will benefit from a particular drug and then monitoring the drug's effectiveness.

 

ANGLE has established formal collaborations with world-class cancer centres and is working with these cancer centres to demonstrate key applications for its Parsortix non-invasive cancer diagnostic system as a liquid biopsy.  The Company's collaborators include: Cancer Research UK Manchester Institute, Medical Research Council Cancer Unit at University of Cambridge, University of Surrey Oncology Group, Barts Cancer Institute, Sidney Kimmel Cancer Center at Thomas Jefferson University, University of Southern California (USC) Norris Comprehensive Cancer Center, The University Medical Center Hamburg-Eppendorf and Medical University of Vienna.

 

ANGLE has today announced an important additional collaboration with the world-leading MD Anderson Cancer Center in the United States (see separate announcement).

 

Business overview and recent activity

 

During the half year to 31 October 2014, collaboration agreements were signed with a further five leading international cancer research centres bringing the total number of key opinion leaders working with the Parsortix system to eight.  MD Anderson increases this to nine.

 

Four of the key opinion leaders publicly reported during the period bringing a total of five key opinion leaders reporting positively on their evaluation of the Parsortix system. 

 

Subsequent to the half year end, commercial collaborations were announced with the diagnostics division of a large pharmaceutical company and with EKF Diagnostics Holdings plc.

 

In January 2015, the Medical University of Vienna reported the results of a patient study for a clinical application in ovarian cancer with the Parsortix system and noted that the system delivers "unprecedented sensitivity and specificity".  ANGLE has now commenced a process, in collaboration with the Medical University of Vienna to develop a clinical application for ovarian cancer.

 

Placing, Subscription and Offer Statistics

 

Issue Price	65p
Number of Ordinary Shares in issue as at the date of this announcement(1) (including the Placing Shares and the Subscription Shares)	56,416,646
Maximum number of Offer Shares being offered pursuant to the Offer	2,307,692
Number of Ordinary Shares in issue following Admission of the Placing Shares, Subscription Shares and Offer Shares (assuming Offer Maximum is taken up)	58,724,338
Number of Offer Shares as a percentage of the issued share capital (including the Placing Shares and the Subscription Shares) as enlarged by the Offer (assuming Offer Maximum is taken up)(1)	3.93%
Number of New Ordinary Shares as a percentage of the enlarged issued ordinary share capital of the Company following the Offer, Placing and Subscription  (assuming Offer Maximum is taken up)	22.96%
Estimated proceeds receivable by the Company, net of expenses  (assuming Offer Maximum is taken up)	£8.2 million

Notes

(1)  Includes a total of 11,173,587 Ordinary Shares allotted conditional on Admission pursuant to the Placing and Subscription announced on 16 February 2015 and expected to be admitted to trading on AIM at 8.00 a.m. on 19 February 2015.

 

Expected Timetable of Principal Events

 

Offer Record Date	13 February 2015
Announcement of the Placing, Subscription and Offer, and posting of the Circular and Application Form	16 February 2015
Admission and dealings in the Placing Shares and Subscription Shares expected to commence on AIM	19 February 2015
CREST accounts expected to be credited for the Placing Shares and Subscription Shares in uncertificated form	19 February 2015
Latest time and date for receipt of completed Application Forms and payment in full under the Offer	11.00 a.m. on 2 March 2015
Expected date of announcement of the result of the Offer via Regulatory Information Service	4 March 2015
Admission and dealings in the Offer Shares expected to commence on AIM	10 March 2015
CREST accounts expected to be credited for the Offer Shares in uncertificated form	10 March 2015
Expected date for posting of share certificates for the Offer in certificated form pursuant to the Offer	19 March 2015

Each of the times and dates in the above timetable is subject to change. If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by announcement through a Regulatory Information Service. References to time in this announcement are to London time.        

 

Current trading and prospects

 

The Company released its results for the 6 months ended 31 October 2014 on 29 January 2015 and these are available on the Company's website at www.angleplc.com.  Since 1 November 2014, the Company has continued to trade in line with Directors' expectations and has made very encouraging progress in relation to an application in ovarian cancer.

 

The Offer

 

The Board considers it important that Qualifying Participants have an opportunity to participate on the same terms as investors in the Placing and Subscription. Qualifying Participants can subscribe for, in aggregate, up to £1.5 million, the Offer Maximum, which is within the limits of authorities previously granted to the Directors permitting them to allot equity securities on a non-pre-emptive basis  We have received advanced assurance from HM Revenue & Customs that the Company may issue compliance certificates for EIS purposes and that the New Ordinary Shares to be issued should be "eligible shares" under Chapter 4 Part 6 of the UK Income Tax Act 2007 and therefore, depending on the circumstances of the investors, the New Ordinary Shares should qualify for relief under the EIS/VCT schemes. The Directors may use their absolute discretion to scale back applications under the Offer as they see fit.

 

It is expected that dealing in the Offer Shares issued pursuant to the Offer will commence on or around 10 March 2015.

 

In order to apply for Offer Shares, Qualifying Participants should complete the Application Form in accordance with the instructions set out in the Circular.

 

The Placing and the Subscription

 

The Company proposes to raise approximately £6.7 million (before expenses) through the issue, conditional on Admission, of the Placing Shares at the Issue Price through Cenkos.  The Issue Price represents a discount of 22.8% to the closing middle market price of 84.25p per Ordinary Share on 13 February 2015, being the last practicable date prior to the announcement of the Placing.  The Placing Shares will represent approximately 17.5% of the Company's issued ordinary share capital immediately following Admission of the New Ordinary Shares (assuming full take up under the Offer).

 

Certain investors have entered into Subscription Agreements whereby they will subscribe, conditional on Admission, for 901,000 New Ordinary Shares at the Issue Price thereby raising a further £0.6 million (before expenses) in aggregate. The Subscription Shares will represent approximately 1.5% of the Company's issued ordinary share capital immediately following Admission of the New Ordinary Shares (assuming full take up under the Offer).

 

Details of the Offer, Placing and Subscription

 

1. The Offer

 

The Offer comprises an offer to Qualifying Participants of up to 2,307,692 Offer Shares with the aggregate consideration to be received by the Company limited to £1.5 million, the Offer Maximum. Qualifying Participants can apply for as many Offer Shares as they wish. However, the Directors reserve the right to exercise their absolute discretion in the allocation of successful applications, including, without limitation, to ensure no Offer Shares are issued so as to exceed the Offer Maximum.

 

The Offer is only open to Qualifying Participants and there is no maximum or minimum subscription per applicant. No Qualifying Participant may subscribe for Offer Shares in excess of the Offer Maximum. Multiple applications may be submitted. Qualifying Participants who are joint Shareholders may only apply for Offer Shares as joint applicants.

 

The Offer is conditional on Admission of the Offer Shares occurring on 10 March 2015 (or such later date, being not later than 24 March 2015, as the Company may decide). If Admission of the Offer Shares has not occurred by such time and date, applications are expected to be returned without interest by crossed cheque in favour of the applicant(s) (at the applicant's risk) through the post as soon as practicable. Any interest earned on the application monies will be retained for the benefit of the Company. The Offer will close at 11.00 a.m. on 2 March 2015 unless previously closed or extended. The Offer is not being underwritten. The Application Form and accompanying procedure for application sets out, in detail, how Qualifying Participants may participate under the Offer.

 

Applications must be made on the terms and conditions set out in the Circular and in the Application Form and by duly completing and returning the Application Form and appropriate remittance.

 

2. The Placing

 

Pursuant to the terms of the Placing Agreement, Cenkos, as broker to the Company, has conditionally agreed to use its reasonable endeavours, as agents for the Company, to place the Placing Shares at the Issue Price with certain institutional and other investors. The Placing Agreement is conditional upon, inter alia, the Subscription Agreements becoming unconditional in all respects and not having been terminated in accordance with their terms (save for any condition relating to Admission or the Placing Agreement becoming unconditional), and Admission of the Placing Shares becoming effective on or before 8.00a.m.on 19 February 2015 (or such later time and/or date as the Company and Cenkos may agree, but in any event by no later than 8.00 a.m. on 19 March 2015). The Placing Agreement contains warranties from the Company in favour of Cenkos in relation to, inter alia, the accuracy of the information contained in the Circular and certain other matters relating to the Group and its business. In addition, the Company has agreed to indemnify Cenkos in relation to certain liabilities they may incur in respect of the Placing, Subscription and Offer. Cenkos has the right to terminate the Placing Agreement in certain circumstances prior to the relevant Admission of the Placing Shares, Subscription Shares and/or Offer Shares including, for force majeure or in the event of a material breach of the warranties set out in the Placing Agreement.

 

3. The Subscription

 

The Subscribers have agreed, conditional on Admission of the Subscription Shares, to subscribe for the Subscription Shares at the Issue Price. The Subscription will raise approximately £0.6 million before expenses for the Company.  The Subscription Agreements contain certain representations and warranties given by the Subscribers to the Company. The Subscription Agreements are conditional on, inter alia, Admission of the Subscription Shares. 

 

Dealings and Settlement on AIM

 

The Offer Shares will be allotted and issued fully paid and will, on issue, rank pari passu with the existing Ordinary Shares, including the right to receive, in full, all dividends and other distributions thereafter declared, made or paid after the date of issue together with all rights attaching to them and free from all liens, charges and encumbrances of any kind. Application will be made to the London Stock Exchange for the Offer Shares to be admitted to trading on AIM. Admission of the Offer Shares to trading on AIM is expected to occur at 8.00 a.m. on 10 March 2015.

 

Risk Factors

 

An investment in the Company involves significant risks and is only suitable for investors who are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses (which may be equal to the whole amount invested) which may result from such an investment. Prospective investors should carefully review and evaluate the risks and the other information contained in the Circular before making a decision to invest in the Company. If in any doubt, prospective investors should immediately seek their own personal financial advice from their independent professional adviser authorised under the Financial Services and Markets Act 2000 (as amended) who specialises in advising on the acquisition of shares and other securities or other advisers such as legal advisers and accountants.

 

If any of the following risks actually occur, the Company's business, financial condition, capital resources, results and/or future operations could be materially and adversely affected. In such circumstances, the trading price of the New Ordinary Shares could decline and investors may lose all or part of their investment. Additional risks and uncertainties not currently known to the Board may also have an adverse effect on the Company's business and the information set out below does not purport to be an exhaustive summary of the risks affecting the Company or the Group. There can also be no guarantee that the Company's investment objectives will be achieved. Prospective investors should be aware that the value of New Ordinary Shares and the income from them may go down as well as up and that they may not be able to realise their investment. In

addition, it is possible that the market price of New Ordinary Shares in the Company may be less than the underlying net asset value per New Ordinary Share.

 

References to the Company are also deemed to include, where appropriate, each member of the Group.

 

Competitive position

There are numerous competitive groups seeking to develop alternative cancer diagnostic products in direct competition (other CTC technologies) and indirect competition (other methods). It is possible at any time that a competing technology which out-performs Parsortix may enter the market. Some competitors have greater resources which may allow them to deploy commercial tactics which restrict the Group.

 

Financial

The Group is investing heavily in research and development and is moving into product launch phases and as a consequence is loss making and utilising cash for its operational activities. The commencement of material revenues is difficult to predict as it involves identifying specific clinical applications and achieving market acceptance; operating losses are anticipated to continue for some time. In the event that new funds are required there can be no guarantee that these will be available on acceptable terms, at the quantum required, or at all, which could affect the ability to commercialise the technology and may require operations to be scaled back, delayed or even affect the ability to continue as a going concern.

 

Intellectual Property

The Group's success depends in part on its intellectual property (IP) in order that it can stop others from exploiting its inventions. There is a risk that patent pending applications will not be issued. It is possible that competitors may infringe this IP or otherwise challenge its validity, which may result in uncertainty, litigation costs and/or loss of earnings.

 

Market acceptance

Success depends on acceptance of the Group's products. Studies are required to demonstrate clinical applications and there is a risk that the data may be weak, inconclusive or negative. The medical diagnostics market is conservative by nature, CTCs are an emerging technology, customers may be slow to adopt new products, vested interests may impede market penetration and products may not achieve commercial success.

 

Manufacturing

As precision equipment, it is extremely important that manufacturing is of a consistent and high quality to ensure that machines and cassettes operate as specified and produce consistent results. The Group must comply with a broad range of regulations relating to the development, approval, manufacturing and marketing of its products and is subject to regulatory inspection.  Product lead times need to be appropriate. Problems at outsourced manufacturers could lead to disruption in supplies, delays, product inconsistency and product failure.

 

Research and development

The Group undertakes significant research and development activity with the aim of launching improved and new products and services, but there remain considerable technical risks, which may result in delays, increased costs or ultimately failure.

 

Regulatory

Major success with the cancer diagnostic product (and other products) will require regulatory authorisation for clinical use from various regulatory authorities which will require data from studies relating to the efficacy, safety and quality of the product. Regulatory regimes are complex and dynamic and it can be difficult to predict their exact requirements, so authorisations may be delayed and alterations to the regulations may also result in delays. If it proves difficult to achieve authorisations, major revenues may be delayed or without authorisation may not be achievable.

 

Staff and key suppliers

The Group's future success is dependent on its management team and staff and there is the risk of loss of key personnel. The Group also outsources certain aspects of product development and manufacturing and is dependent on these key suppliers and its collaborations with key opinion leaders.

 

Liquidity of the New Ordinary Shares

The future success of AIM and liquidity in the market for the New Ordinary Shares cannot be guaranteed. In particular, the market for the New Ordinary Shares may be, or may become, relatively illiquid and, therefore, the New Ordinary Shares may be or may become difficult to sell. Admission to AIM does not imply that there will always be a liquid market for the New Ordinary Shares.

 

EIS and VCT status

The Company has received advanced clearance from HM Revenue & Customs that the Company should be a "qualifying holding" for the purposes of the EIS and for investment by a VCT under Chapter 4 Part 6 of the UK Income Tax Act 2007, The advance clearance only relates to the qualifying status of the Company and its shares and will not guarantee that any particular investor, including any VCT investor, will qualify for relief in respect of an acquisition of Ordinary Shares. Any investor who is a Qualifying Employee (or an associate of a Qualifying Employee for EIS purposes) will not be entitled to claim EIS relief, nor will any Qualifying Shareholder who has been an employee of the Company (or an associate of an employee) within the two year period prior to the date of Subscription.  The continuing availability of EIS relief and the status of the relevant New Ordinary Shares as a qualifying holding for VCT purposes will be conditional amongst other things, on the Company continuing to satisfy the requirements for a qualifying company throughout the period of three years from the date of the investor making its investment (under EIS) and, for VCT purposes, throughout the period the Ordinary Shares are held as a "qualifying holding". Neither the Company nor the Company's advisers are giving any warranties or undertakings that any relief under the EIS or that VCT qualifying status will be available in respect of the Placing, Subscription or Offer, or that in due course such relief or status will not be withdrawn.

 

Any person who is in any doubt as to their taxation position should consult their professional tax adviser in order that they may fully understand how the rules apply in their individual circumstances.