VANCOUVER, April 16, 2012 /PRNewswire/ - Allon Therapeutics Inc. (TSX: NPC) announced today that it plans to complete a brokered
private placement equity offering to raise approximately $10.0 million.
The placement is substantially committed. The proceeds will be used for
the completion of Allon's ongoing pivotal clinical trial, testing lead
product candidate davunetide as a potential treatment for progressive supranuclear palsy (PSP) and general corporate purposes. Allon expects to complete the
pivotal trial in Q4 2012.
The Company is offering equity units and subscription receipts, both
priced at $0.25 each for a total of approximately 40,000,000 units.
Each unit consists of one common share and one half of one common share
purchase warrant. Each share purchase warrant will entitle the holder
to acquire one common share at a price of $0.40 for a period of 60
months from the closing date of the offering. The subscription receipts
which are expected to be about half the placement, are required by TSX
rules pertaining to insider participation and dilution triggers,
convert into identical units subject to shareholders approval which the
Company will seek at its June 13 annual meeting. The funds for the
subscription receipts will be advanced into escrow pending the
shareholders meeting. Neuro Discovery II LP, an insider, is
participating in the placement through the purchase of at least $2.5
million of subscription receipts which will be partially funded by the
proceeds from the concurrent repayment of the $2.5 million convertible
debenture it subscribed for in February, 2012.
The private placement is subject to all necessary regulatory approvals
including the approval of the TSX. The Company intends to close this
placement on or about April 19, 2012.
Bloom Burton & Co., a healthcare-specialized investment banking group
based in Canada, is acting as the placement agent for this offering and
will receive cash commission and agent's warrants on a portion of the
placement. A news release will be issued on completion disclosing the
final placement participation details.
Allon Therapeutics Inc. is a clinical-stage biotechnology company
focused on bringing to market innovative central nervous system
therapies. Allon's lead drug davunetide is proceeding in a pivotal clinical trial in an orphan indication, in progressive supranuclear palsy (PSP), under a Special Protocol Assessment (SPA) with the U.S. Food and
Drug Administration (FDA). The trial is fully enrolled and is expected
to complete patient dosing and release top-line data by late 2012. This
pivotal trial is based upon statistically significant human efficacy
demonstrated in patients with amnestic mild cognitive impairment (a
precursor to Alzheimer's disease), cognitive impairment associated with
schizophrenia, and in positive biomarker data.
The Company is listed on the Toronto Stock Exchange under the trading
Forward Looking Statements
Statements contained herein, other than those which are strictly
statements of historical fact may include forward-looking information.
Such statements will typically contain words such as "believes", "may",
"plans", "will", "estimate", "continue", "anticipates", "intends",
"expects", and similar expressions. While forward-looking statements
represent management's outlook based on assumptions that management
believes are reasonable, forward-looking statements by their nature are
subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, events or developments to be
materially different from any future results, events or developments
expressed or implied by them. Such factors include, among others, the
inherent uncertainty involved in scientific research and drug
development, Allon's early stage of development, lack of product
revenues, its additional capital requirements, the risks associated
with successful completion of clinical trials and the long lead-times
and high costs associated with obtaining regulatory approval to market
any product which Allon may eventually develop. Other risk factors
include the limited protections afforded by intellectual property
rights, rapid technology and product obsolescence in a highly
competitive environment and Allon's dependence on collaborative
partners and contract research organizations. These factors can be
reviewed in Allon's public filings at www.sedar.com and should be considered carefully. Readers are cautioned not to place
undue reliance on such forward-looking statements. Similarly, nothing
in this press release is meant to promote a pharmaceutical product or
make a regulated claim of efficacy.
Allon Therapeutics Inc.
Director, Investor Relations
SOURCE Allon Therapeutics Inc.