13 May, 2021
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Proposed Fundraise in excess of £20 million

Conditional Placing to raise approximately £17.9 million, Conditional Subscription to raise approximately £2.1 million, and Retail Offer via the PrimaryBid Platform.

e-therapeutics plc announces a proposed fundraise in excess of £20 million before expenses by way of a conditional placing to institutional and other investors (the "Placing"), conditional direct subscriptions with the Company by individual investors (the "Subscription"), and a conditional offer to retail and other investors via the PrimaryBid platform (the "Retail Offer", and together with the Placing and the Subscription, the "Fundraise"). The issue of new Ordinary Shares pursuant to the Fundraise will be conditional on, inter alia, shareholder approval being received by way of a special resolution at the Annual General Meeting ("AGM") of the Company which is expected to be held on or around 16 June 2021.

A separate announcement will be made shortly by the Company regarding the Retail Offer and its terms. Those investors who subscribe for new Ordinary Shares pursuant to the Retail Offer will do so pursuant to the terms and conditions of the Retail Offer contained in that announcement. The Subscription Shares will be subscribed for pursuant to the Subscription Letters, rather than pursuant to the terms and conditions of the Placing contained in Appendix I to this Announcement.

Highlights of the Fundraise

  • A proposed total Fundraise in excess of £20 million before expenses, comprising:
    • the Placing to raise in excess of £17.9 million before expenses through the issue of an expected 74,624,999 new Ordinary Shares (the " Placing Shares") at a price of 24 pence per Placing Share (the "Placing Price"), equating to approximately 17 per cent of the Existing Ordinary Shares;
    • the Subscription to raise approximately £2.1 million before expenses through the issue of 8,708,334 new Ordinary Shares (the "Subscription Shares") at the Placing Price, equating to approximately 2 per cent of the Existing Ordinary Shares; and
    • a Retail Offer to be made by the Company via the PrimaryBid platform at the Placing Price, to provide certain existing retail shareholders in the Company and other retail investors with an opportunity to participate in the Fundraise.
  • The Placing will be conducted by way of an accelerated bookbuild process which will be launched immediately following this Announcement, in accordance with the terms and conditions set out in Appendix 1 to this Announcement. The Placing is expected to close on 13 May 2021. A further announcement will be made in due course, confirming the final quantum and number of shares to be raised pursuant to the Placing and Subscription once the bookbuild is closed.
  • The Placing Price represents a discount of approximately 17% to the closing middle market price of 28.8p per Ordinary Share on 12 May 2021, being the latest practicable date prior to the date and time of this Announcement.
  • The net proceeds of the Fundraise will be used to facilitate a number of initiatives, with a focus on expanding the Company's proprietary, disease-agnostic, drug discovery and development platform capabilities and asset pipeline.
  • The issue of new Ordinary Shares pursuant to the Fundraise will be conditional on, inter alia, shareholder approval being received by way of a special resolution (the "Resolution") at the Company's AGM which is expected to be held on or around 16 June 2021.
  • None of the Placing, the Subscription or the Retail Offer is underwritten.
  • SP Angel Corporate Finance LLP ("SP Angel") is acting as Nominated Adviser, sole bookrunner and sole Broker to the Company in relation to the Placing.

Company overview and reasons for the Fundraise

e-therapeutics aims to transform the drug discovery process by leveraging its computational power and biological expertise to accelerate the path to more effective therapies. The Company has developed a proprietary, disease-agnostic platform to produce valuable disease biological insights and potential drug candidates.

e-therapeutics' expertise in network biology, computational drug discovery and drug development, coupled with the Company's nascent RNAi platform, gives it a competitive advantage through effective target identification, in silico screens yielding high hit rates and a rapid and validated development path. This broad expertise underpins many of the operational highlights for the Company this year. The collaboration agreement with Galapagos in IPF, with potential in other fibrotic conditions, and type-2 diabetes agreement with Novo Nordisk are validation of the Company's platform, highlighting the ability of the network approach and expertise to go beyond pure in silico predictions and identify potentially clinically viable interventions with supporting experimental data.

The significant progress made on the GaINAc-siRNA platform will enable the Company to benchmark its performance against competitor candidates. In parallel, the Company has also established a dedicated group to leverage its computational network biology discovery platform specifically for the identification of novel target genes expressed in hepatocytes, which are amenable to GaINAc-mediated siRNA delivery.

The Company believes that the combination of these elements will enable e-therapeutics to offer an attractive business development proposition to potential collaborators. The business model incorporates partnering around targets and small molecule compounds in addition to the development of an in-house pipeline of RNAi therapeutics, retaining scope for early-stage transactions.

Biology is complex and a lack of biological understanding often underpins failures in drug development. The Company's strategic ambition is to transform the drug discovery process, utilising our network biology platform to better model human disease biology and harnessing those mechanistic insights to discover and develop better therapies, both with partners and internally in the RNAi space.

The Directors believe there is a further opportunity to accelerate the next stage of its growth and value creation through the proposed Fundraise. The net proceeds of the Fundraise will be used to facilitate a number of initiatives, with a focus on expanding the Company's platform capabilities and asset pipeline, including investing in:   

  • Generate experimental hepatocyte specific proprietary data for the Company's in silico discovery engine;
  • Advance two to three RNAi therapeutic programmes through preclinical development;
  • Aim to complete a First in Human (FIH) clinical study for one RNAi asset to provide additional validation;
  • Further development of the Company's computational platform and general working capital including team expansion; and
  • Exploration of RNAi in other cell types.

I am excited by the potential of e-therapeutics' proprietary platform technologies to meaningfully transform and accelerate the drug discovery process, especially when combined with RNAi as a therapeutic modality. The prospect of being able to accelerate the development our in-house RNAi pipeline through enhanced investment in our hepatocyte data set and computational capabilities confirms my belief in our business model. Partnering around our in silico discovery engine will continue to be an important focus.  We are grateful for the support of our existing and new shareholders and look forward to delivering value from our platform.

Ali Mortazavi

Chief Executive Officer

Details of the Conditional Placing

The Company and SP Angel have today entered into a placing agreement (the "Placing Agreement"), pursuant to which, on the terms and subject to the conditions set out therein, SP Angel has agreed to use its reasonable endeavours to procure, as the Company's agent, Placees for the expected 74,624,999 Placing Shares at the Placing Price, raising gross proceeds of approximately £17.9 million for the Company.

The Placing Agreement contains customary undertakings and warranties given by the Company to SP Angel including as to the accuracy of information contained in this Announcement, to matters relating to the Company and its business and a customary indemnity given by the Company to SP Angel in respect of liabilities arising out of or in connection with the Fundraise.

The terms and conditions of the Placing are set out in Appendix I to this Announcement.

The Placing Shares, when issued, will be fully paid and will rank pari passu in all respects with each other and with the Existing Ordinary Shares, including, without limitation, as regards the right to receive all dividends and other distributions declared, made or paid after the date of issue.

The Placing is conditional upon, inter alia, shareholder approval being received at the Company's upcoming AGM, expected to take place on or around 16 June 2021, the Placing Shares being admitted to trading on AIM by not later than 8.00 a.m. on 17 June 2021, or such later time and/or date as the Company and SP Angel may agree (being not later than 8.00 a.m. on 30 June  2021) and the Placing Agreement not having been terminated in accordance with its terms.

Appendix I to this Announcement sets out further information relating to the terms and conditions of the Placing.

No element of the Placing (and for the avoidance of doubt, the Fundraise) is underwritten.

Details of the Conditional Subscription

The Company has entered into subscription agreements with various individual investors, pursuant to which the Company has agreed to issue the Subscription Shares to such individual investors, at the Placing Price, raising gross proceeds for the Company of approximately £2.1 million (the "Subscription Letters"). The Subscription Shares will be subscribed for on the basis agreed pursuant to the Subscription Letters, rather than pursuant to the terms and conditions of the Placing contained in Appendix I to this Announcement.

The Subscription Shares, when issued, will be fully paid and will rank pari passu in all respects with each other and with the Existing Ordinary Shares, including, without limitation, as regards the right to receive all dividends and other distributions declared, made or paid after the date of issue.

The Subscription is conditional upon, inter alia, shareholder approval being received at the Company's upcoming AGM, expected to take place on or around 16 June 2021, the Admission of the Subscription Shares becoming effective not later than 8.00 a.m. on 17 June 2021, or such later time and/or date as the Company may agree (being not later than 8.00 a.m. on 30 June 2021). The Subscription is also conditional upon the Placing Agreement becoming unconditional in all respects and not being terminated in accordance with its terms.

Issue of Equity and Admission

Applications will be made to the London Stock Exchange for admission of the Placing Shares, the Subscription Shares and any Retail Shares to trading on AIM.

It is expected that Admission will take place at 8.00 a.m. (UK time) on or around 17 June 2021 and that dealings in the Placing Shares, Subscription Shares and any Retail Shares on AIM will commence at the same time. Admission will be subject to shareholder approval of the required Resolutions at the Company's upcoming AGM. 

Related Party Transaction

Richard Griffiths, and his controlled undertakings ("Richard Griffiths"), which currently hold 118,539,105 Ordinary Shares (representing approximately 28.17   per cent. of the Existing Ordinary Shares), have agreed to subscribe for a total of 25,000,000 Placing Shares pursuant to the Placing. As a consequence of Richard Griffiths' current interest in the Company, his proposed participation in the Placing is a related party transaction pursuant to AIM Rule 13. Accordingly, the independent directors of the transaction, being Ali Mortazavi and Trevor Jones, consider, having consulted with the Company's nominated adviser, SP Angel, that the terms of Richard Griffiths' participation in the Placing are fair and reasonable insofar as the Company's shareholders are concerned.

The Takeover Code

As a public company which has its registered office in the United Kingdom and which has its Ordinary Shares admitted to trading on AIM, the Company is subject to the City Code on Takeovers and Mergers (the "Takeover Code"). Under Rule 9 of the Takeover Code, any person who acquires an interest (as such term is defined in the Takeover Code) in shares which, taken together with the shares in which he and persons acting in concert with him are interested, carry 30 per cent. or more of the voting rights in a company which is subject to the Takeover Code, is normally required to make a general offer to all of the remaining shareholders to acquire their shares.

As detailed above, Richard Griffiths currently holds 118,539,105 Ordinary Shares, representing 28.17 per cent. of the Ordinary Shares in issue as at the date of the Announcement. Richard Griffiths is also deemed to be acting in concert with Mike Bretherton, a Non-executive Director of the Company (together the "RG Concert Party"). Richard Griffiths has agreed to subscribe for a total of 25,000,000 Placing Shares pursuant to the Placing, such that following Admission of both the Placing Shares and the Subscription Shares, the RG Concert Party's holding of Ordinary Shares will represent 28.47 per cent. of the issued share capital of the Company.

All Placees and Subscribers have irrevocably undertaken (in the case of Placees, pursuant to the Terms and Conditions of the Placing set out in Appendix I to this Announcement and, in the case of Subscribers, pursuant to the terms and conditions of the Subscription Letters) to subscribe for the relevant  Placing Shares or Subscription Shares and to make payment for the same in accordance with the deadlines therein. In the unlikely event that a Subscriber or a Placee defaulted on its legally-binding obligations (including in making payment for the relevant Placing Shares or Subscription Shares), there is a risk that the RG Concert Party might exceed the 30 per cent. threshold and be required to make a mandatory offer pursuant to Rule 9 of the Takeover Code. In the event of such a default, notwithstanding any other right which the Company and/or SP Angel may have against the subscriber in default, SP Angel, as agent of the Company, reserves the right to take any such action as may be required in order to ensure that the RG Concert Party's holding does not at any point exceed 29.9 per cent of the issued share capital of the Company. Therefore, in such an event, SP Angel reserves the right, amongst other things, to extend any date specified herein (including in respect of settlement, registration, payment and Admission) and/or scale back the RG Concert Party's commitment for the Placing and/or otherwise re-allocate Placee's commitments in the Placing as it may determine (subject to agreement with the Company). Any changes to the material terms of the Placing as set out herein shall be notified by the Company via a regulatory information service.

The capitalised terms used in this Announcement have the meaning set out in Appendix II to this Announcement.

The ticker for the Company's Ordinary Shares is ETX. The Company's LEI is 21380049RHSSJXWKYT18.

This Announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (as amended) as it forms part of the domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (as amended) ("MAR"), encompassing information relating to the Fundraise described above, and is disclosed in accordance with the Company's obligations under Article 17 of MAR. For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Company by Ali Mortazavi, Chief Executive Officer. In addition, market soundings (as defined in MAR) were taken in respect of the Placing and Subscription with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR.  This inside information is set out in this Announcement. Therefore, upon publication of this announcement, those persons that received such inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.

This Announcement should be read in its entirety. In particular, your attention is drawn to the "Important Notice" section of this Announcement below and to the detailed terms and conditions of the Placing set out in Appendix I. By choosing to participate in the Fundraise, investors will be deemed to have read and understood this Announcement in its entirety, and by choosing to participate in the Placing and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to be making such offer on the terms and subject to the conditions in it, and to be providing the representations, warranties and acknowledgements contained in Appendix I.