Preferential rights issue in Prostatype Genomics

Preferential rights issue for commercialization in the US and other selected markets

In October 2023, Prostatype Genomics presented an updated, more cost-effective commercial strategy for its gene test Prostatype® with the main focus on launching the product in the United States and obtaining reimbursement by Medicare, the country’s largest health care system. Furthermore, the product is marketed by Prostatype in the Nordic region, and the company’s partner Eurofins Megalab is responsible for the commercialization in Spain. In addition to the United States, the Nordics and Spain, Prostatype Genomics will focus its sales resources on Taiwan, the UK and Switzerland.

 

In the US, there is a large and established market for genetic prostate cancer tests, with several products approved for reimbursement. In order to qualify Prostatype® for reimbursement, the company is currently conducting a validation study in the United States to, among other things, supplement the existing data package with data on African American patients. A first interim readout that will form the basis for the reimbursement application is planned for the second quarter of 2024. The company assesses that it is possible, given good results from this readout, to obtain approval for reimbursement by Medicare and other payers at the end of 2024.

 

Use of the proceeds from the preferential rights issue

Upon full subscription, the company will receive net cash proceeds of approximately SEK 42.6 million. The net proceeds received is intended to be used for the following areas of use, in order of priority:

  • Repayment of bridge loans for already started commercialization and study activities in the United States, SEK 6 million
  • Validation study in the United States, SEK 20 million
  • Commercialization activities in the United States and Europe, SEK 5 million
  • Strengthening of working capital and ongoing operation activities, SEK 11.6 million

If all warrants of series 3 are exercised for subscription of shares, the company will receive at least an additional SEK 4.8 million in proceeds, depending on the final exercise price. The company intends to use the proceeds in its entirety for the continued execution of the validation study in the United States.

To use the proceeds from the rights issue as efficiently as possible, the company presented an updated strategy and cost-reduction plan in October 2023. The plan includes a narrower market focus with initial establishment in the United States and selected markets in Europe and Asia. The cost-reduction plan is expected to reduce the company’s running costs by 30 percent, equivalent to SEK 9 million, on an annual basis, without affecting expected sales and continued research work.

Commercial progress in the second half of 2023

The company has announced several advances in its selected markets during the fall of 2023, including:

 

  • An ongoing validation study in the United States with the first interim readout in Q2 2024 expected to contribute supplemental data to the Medicare reimbursement application.
  • In Spain, a local validation study continues at seven Spanish hospitals, where positive interim results were presented in October 2023: the treatment plan had been changed for as much as 60 percent of the investigated cases if Prostatype® had been used. Final data is expected to be presented in the first quarter of 2024.
  • In Taiwan, a study was completed in October 2023. The study included 148 patients and showed significantly superior performance of Prostatype® in predicting prostate cancer-specific mortality compared to the standard risk classification systems used in Taiwan today such as NCCN® (National Comprehensive Cancer Network) and PSA.
  • A first order in Switzerland, from a large university hospital, was received in November 2023.

Timeline for the rights issue

  • December 7
Extraordinary general meeting
  • December 7
Last day of trading in the share with the right to receive unit rights
  • December 8
First day of trading in the share without the right to receive unit rights
  • December 11
Record date for participation in the rights issue
  • December 11
Expected date for the publication of the prospectus
  • December 13 – 20
Trading in unit rights
  • Dec 13 – Jan 5
Subscription period
  • January 5
Expected date for publication of preliminary outcome of the rights issue
  • January 9
Expected date for publication of the final outcome in the rights issue

Summary of the rights issue

Subscription period
December 13, 2023 – Jan 5, 2024

Subscription price
0.04 SEK per share

Issue size
SEK 47.8 million

Guaranteed to
45.0%

Preferential right

One (1) existing share in the company entitles to one (1) unit right. One (1) unit right entitles to subscribe for one (1) unit, consisting of ten (10) newly issued shares and four (4) newly issued warrants of series 3. This means that a maximum of 1,194,600,070 new shares and 477,840,028 new warrants of series 3 can be issued.

Subscription price

The subscription price has been set at SEK 0.40 per unit, corresponding to SEK 0.04 per share. The warrants are included free of charge. Payment must be made in cash.

Issue size

Through the rights issue, proceeds of maximum SEK 47.8 million will be provided to Prostatype Genomics before deductions for costs attributable to the rights issue, which are estimated to amount to SEK 5.1 million, of which approximately SEK 1.9 million consists of underwriting compensation.

Subscription period

The subscription period runs from December 13, 2023 to and including January 5, 2024.

Subscription commitments and underwriting agreements

The rights issue is covered by subscription commitments and underwriting agreements corresponding to a total of approximately SEK 21.5 million. The subscription commitments amount to approximately SEK 7.6 million, corresponding to approximately 15.9 percent of the rights issue. Subscription commitments and underwriting commitments from senior executives and board members of Prostatype Genomics amount to a total of SEK 4.3 million. For underwriting commitments, a compensation of 14.0 percent of the guaranteed amount is due, to be paid in cash, alternatively a compensation of 16.0 percent of the guaranteed amount to be paid in shares in the company. No compensation is paid for the subscription commitments. The subscription commitments and underwriting agreements are not secured by bank guarantee, blocking funds, pledging or similar arrangements.

Trading in unit rights

Unit rights that are not exercised during the subscription period become invalid and lose their value. Trading in unit rights is planned to take place on the Nasdaq First North Growth Market from December 13, 2023 to and including December 20, 2023.

Share capital and dilution

Through the rights issue the company’s share capital can increase by a maximum of SEK 16,724,400.98 (the new quota value – 1 öre – after the proposed reduction is applied), of which a maximum of SEK 11,946,000.70 is attributable to an increase due to the issue of shares and a maximum of SEK 4,778,400.28 is attributable to an increase due to the issue of warrants (if these areexercised). This corresponds to a maximum dilution of approximately 90.9 percent regarding the new shares. In the event that all warrants are exercised, an additional dilution comes into effect, corresponding to approximately 26.7 percent in relation to the new number of shares.

Included warrants

The exercise period for warrants of series 3 runs from April 5, 2024 to and including April 19, 2024. If all warrants of series 3 are exercised to subscribe for shares, the proceeds to company will amount to an additional SEK 4.8 million depending on the final exercise price.

Extraordinary general meeting

The board of directors’ resolution of the rights issue is subject to the approval by an extraordinary general meeting which is intended to be held on December 7, 2023. The notice of the extraordinary general meeting will be published through a separate press release.

Record date

The record date in the rights issue is December 11, 2023. The last trading day in the Prostatype Genomics share, including the right to receive the unit rights, is December 7, 2023.

Press releases and news

 

 

Press release November 7, 2023: Prostatype Genomics resolves on a rights issue of approximately SEK 47.8 million

Press release November 7, 2023: Notice of Extraordinary General Meeting in Prostatype Genomics AB (publ)

Press release November 30, 2023: Prostatype Genomics AB (publ) changes Certified Adviser to Carnegie Investment Bank AB (publ)

Press release December 7, 2023: Communiqué from Extraordinary General Meeting in Prostatype Genomics AB (publ) held on 7 December 2023

Press release December 11, 2023: Prostatype Genomics publishes prospectus due to upcoming preferential share issue

Sponsored article December 13, 2023: Tailored treatment plans save men from unnecessary suffering

Filmed company presentation December 14, 2023: Biostock Investor Pitch

Sponsored article December 14, 2023: ”Our USA project has low related risks”

Press release December 15, 2023: Important information regarding the market capitalization value of Prostatype Genomics AB (publ) on certain financial websites

Sponsored article December 19, 2023: Medical technology company aims for rapid commercialisation in the United States

Press release December 21, 2023: Prostatype Genomics publishes monthly newsletter and its net sales for the third quarter of 2023

Press release December 22, 2023: Long term follow up study at Akademiska University Hospital, Uppsala, to be presented at EAU-meeting, May 2024: Indicates new area of use for Prostatype®

Press release December 22, 2023: Prostatype Genomics extends subscription period to January 5, 2024 due to upcoming supplementary prospectus

Press release January 4, 2024: Publication of supplementary prospectus

Press release January 6, 2024: Prostatype Genomics announces preliminary outcome of the Rights Issue

Press release January 10, 2024: Prostatype Genomics announces final outcome of the Rights Issue

Press release January 16, 2024: Rights issue registered and trading in paid subscription units ceases

Press release January 16, 2024: Prostatype Genomics AB carries out a directed share issue to guarantors following completed rights issue

Filmed company presentation

Ask Prostatype Genomics a question about the preferential rights issue

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Important information

Due to legal restrictions, the information on this website is only intended for certain recipients. Recipients of this offer in jurisdictions where this offer has been published or distributed should inform themselves of and comply with such restrictions. This offer does not constitute an offer to, or an invitation to, acquire or subscribe for any securities of the Company in any jurisdiction, either from Prostatype Genomics or any other party, where such an offer would be unlawful. No action has been taken and no action will be taken to permit an offer to the public in any jurisdictions other than Sweden. The invitation to interested persons to subscribe for shares in Prostatype Genomics by exercising TO3 warrants will only take place through the prospectus that Prostatype Genomics published on December 11, 2023, including the addendum to the prospectus published on January 3, 2024.   The information on this website may not be disclosed, published or distributed, directly or indirectly, within or to the United States, Belarus, Russia, Australia, Hong Kong, Japan, Canada, New Zealand, Switzerland, Singapore, South Africa or any other jurisdiction where such action would be illegal, subject to legal restrictions or require measures other than those that follow from Swedish law. Actions contrary to this instruction may constitute a violation of applicable securities legislation. No shares or other securities of Prostatype Genomics have been registered, and no shares or other securities will be registered, according to the United States Securities Act of 1933, as amended ("Securities Act"), or the securities legislation of any state or other jurisdiction of the United States and may not be offered, sold or otherwise transferred, directly or indirectly, in or to the United States, except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and pursuant to the securities legislation of the relevant state or other jurisdiction in the United States. This communication is distributed to and directed solely to persons in the United Kingdom who are (i) professional investors falling within the scope of the Article 19(5), as amended, of the U.K. Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 ("the Order") or (ii) high net worth subjects and other persons to whom this notice may lawfully be addressed, who are subject to Article 49(2)(a)-(d) ) in the Order (all such persons are collectively referred to as "Relevant Persons"). Persons who are not Relevant Persons may not act on or rely on the information in this communication. An investment or investment measure referred to in this communication is only possible for Relevant Persons and will only be completed with Relevant Persons. Persons who disseminate this communication must themselves ensure that such dissemination is permitted.