Cizzle Biotechnology Holdings PLC (LON:CIZ), the UK based diagnostics developer, has announced that it has undertaken a conditional placing of 31,050,000 new ordinary shares of 0.01p each in the Company at a price of 2 pence per share raising approximately £0.62 million before expenses for the Company.
Allenby Capital Limited is acting as sole broker in connection with the Placing. The Placing has been conducted with existing and new investors.
DirectorsTalk caught up with Cizzle Biotechnology Executive Chairman, Dr Allan Syms to discuss the news:
Highlights
· Placing to raise gross proceeds of approximately £0.62 million through the issue of 31,050,000 Ordinary Shares at 2p per Ordinary Share
· The net proceeds of the Placing will be utilised towards completing the Company’s first proposed commercial test to detect CIZ1B, further protect the Company’s Intellectual Property (IP), progress the Company’s research with the University of York and for general corporate purposes
· Upon completion of the Placing, the Company intends to terminate the £500,000 loan facility agreement with E3 Fund SP entered into on 20 September 2022. This facility has not been drawn down
Allan Syms, Executive Chairman of Cizzle, commented:
“We are pleased with the continued support from investors for the Placing. The net proceeds will enable the Company to enter into the manufacturing and scale up of key antibodies and reagents, that following performance testing in clinical trials are intended to become the core components of our first proposed commercial test for the CIZ1B biomarker. I look forward to providing further updates as matters progress.”
Background to and reasons for the Placing
Since the release of the Company’s interim results to 30 June 2023 on 28 September 2023, Cizzle has continued to make progress in the development of the Company’s proprietary assay for the CIZ1B biomarker, which is highly associated with early-stage lung cancer. In particular, the Company has successfully completed an antibody development programme with ProteoGenix, a France-based antibody development and production contract research organisation (CRO), with a track record in generating antibodies from development to production for therapeutic, diagnostic and research use. The Directors believe that the new antibodies from this development programme should extend the range and proprietary rights that the Company has for detecting the CIZ1B Biomarker.
The net proceeds of the Placing will be deployed primarily to enter the scale-up and manufacturing phase for the main components of the Company’s proposed commercial test for CIZ1B. Key anticipated milestones will be the production of a final antibody to accredited quality standards, other design and testing work, IP protection and progressing regulatory matters. It is currently anticipated that clinical trials of commercial grade components and ultimately the launch of the first test for CIZ1B will be in the USA. The Company will also use the net proceeds of the Placing to continue to support core research being undertaken on the Company’s behalf at the University of York and for general corporate purposes.
Details of the Placing
The fundraise comprises a Placing of 31,050,000 new Ordinary Shares (the “Placing Shares”) at the Issue Price. The Placing Shares are to be issued pursuant to the authorities granted to the Board at the Company’s annual general meeting held on 28 June 2023 on a non-pre-emptive basis.
When issued, the Placing Shares will represent approximately 7.83 per cent of the enlarged share capital of the Company and will rank pari passu with the existing Ordinary Shares.
The Issue Price represents a discount of approximately 22 per cent. to the closing mid-market price of 2.55 pence of an Ordinary Share on 25 March 2024, being the latest practicable date prior to the publication of this announcement.
The Company and Allenby Capital have entered into a placing agreement pursuant to which Allenby Capital has, subject to certain conditions, procured subscribers for the Placing Shares at the Issue Price. The Placing Agreement contains provisions entitling Allenby Capital to terminate the Placing (and the arrangements associated with it), at any time prior to Admission (as defined below) in certain circumstances, including in the event of a material breach of the warranties given in the Placing Agreement, the failure of the Company to comply with its obligations under the Placing Agreement, or the occurrence of a force majeure event or a material adverse change affecting the financial position or business or prospects of the Company. If this right is exercised, the Placing will not proceed and any monies that have been received in respect of the Placing will be returned to the applicants without interest and Admission will not occur. The Company has agreed to pay Allenby Capital a placing commission and all other costs and expenses of, or in connection with, the Placing.
The Placing is not being underwritten by Allenby Capital or any other person.
Proposed cancellation of £500,000 Loan Facility
Upon completion of the Placing, the Company intends to terminate the £500,000 loan facility agreement with E3 Fund SP (“E3”) entered into on 20 September 2022, and amended on 21 April 2023 and 9 June 2023. The Loan Facility has not been drawn down.
Appointment of Joint Broker
Cizzle is pleased to announce that it has appointed Allenby Capital as joint broker to the Company, with immediate effect, in addition to Allenby Capital’s existing role as financial adviser to the Company.
Issue of Fee Shares in Lieu
The Company has agreed to issue 1,500,000 new Ordinary Shares at 2 pence per new Ordinary Share in satisfaction of payment of £30,000 for professional advisory services to Novum Securities Limited.
Admission and Total Voting Rights
Application will be made for the 31,050,000 Placing Shares and the 1,500,000 Fee Shares (together the “New Shares”) to be admitted to trading on the Main Market of the London Stock Exchange and to listing in the Standard Segment of the FCA Official List. It is expected that the issue of the 32,550,000 New Shares will take place, Admission will become effective and that dealings in the New Shares on the Main Market of the London Stock Exchange will commence on or around 11 April 2024.
On Admission, the Company will have 396,391,773 Ordinary Shares in issue, each with one voting right. There are no shares held in treasury. Therefore, the Company’s total number of Ordinary Shares and voting rights will be 396,391,773 and this figure may be used by shareholders from Admission as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA’s Disclosure Guidance and Transparency Rules.
Cizzle Biotechnology is developing a blood test to facilitate the early detection of lung cancer based on the ability to detect a stable plasma biomarker, a variant of CIZ1 known as CIZ1B. CIZ1 is a naturally occurring cell nuclear protein involved in DNA replication, and the targeted CIZ1B variant has been shown to be highly correlated with early-stage lung cancer. The Company’s proprietary technology results from the work of Professor Coverley and colleagues at the University of York.
