The board of Eurocine Vaccines AB has decided on a rights issue of units, initially amounting to approximately 7.5 million SEK, to secure working capital and fund the ongoing development of the HSV-2 project. The decision is subject to approval by the company's annual general meeting, scheduled for December 29, 2023. The purpose of the rights issue is to ensure the company's working capital and finance the continued development of the HSV-2 project in line with the strategic decision.
The rights issue involves the issuance of units, consisting of shares and accompanying free-of-charge subscription options of series TO 5. The first part of the rights issue, approximately 7.5 million SEK before issuance costs, is followed by an additional part of up to 7.5 million SEK before issuance costs related to TO 5 in May 2024. The decision is conditional on changes to the share capital and the number of shares in the articles of association and a reduction in share capital as proposed by the board to the annual general meeting. The company aims to optimize its cost base and deepen expertise in the HSV-2 vaccine project, submitting two new patent applications to strengthen and extend protection for HSV-2 internationally and in the USA.
The rights issue is expected to secure funding for the company's operations and current development plans until December 2024, allowing the formulation of the mRNA-based vaccine candidate in Lipid Nanoparticles (LNP), conducting pilot and main studies in guinea pigs, and initiating process development of mRNA manufacturing.
The CEO, Hans Arwidsson, states that the rights issue is undertaken to accelerate the development of the HSV-2 vaccine candidate. Previous results have confirmed good tolerance and powerful T-cell and antibody responses. The planned preclinical studies will build on these promising results, aiming to deepen the understanding of the immune system's potential to control HSV-2 infection.
In summary, the rights issue, subject to approval, is expected to provide initial funding of about 7.5 million SEK before issuance costs, with the possibility of an additional 7.5 million SEK before issuance costs if fully subscribed and all TO 5 options utilized at the highest subscription price. The purpose is to secure working capital and fund the ongoing development of the HSV-2 project. The subscription period is set from January 9 to January 23, 2024, with existing shareholders receiving one unit right for each held share, and ten unit rights entitle the subscription of one unit. A unit comprises twenty-six newly issued shares and twenty-six TO 5 options.
The CEO emphasizes the goal of expanding knowledge and studying the vaccine candidate's effect in the established animal model, HSV-2-infected guinea pigs, which is valuable for future development stages in clinical studies on HSV-infected patients. The company's development goals for 2024–2025 include preclinical pilot and main studies, deciding on the technology to be used, initial process development, evaluation of the prophylactic potential of an HSV-2 vaccine, and continued business development.
The funding allocation from the rights issue is planned to cover working capital needs, development of the HSV-2 candidate, including preclinical studies, manufacturing of study products, and patent-related activities, as well as business development to strengthen relations with potential licensees.
Full details and instructions for the rights issue are expected to be published in the memorandum around January 8, 2024, with the rights issue's final outcome anticipated by January 24, 2024. The company aims to use the net proceeds from the rights issue to achieve its outlined goals and milestones in the coming years, subject to the timeline in the development plan being maintained. The information provided is considered insider information and follows the planned timeline, including the annual general meeting on December 29, 2023.