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Isconova Carries Out a Fully Guaranteed Rights Issue of Approximately SEK 50 Million


8/27/2012 11:44:31 AM

Uppsala, 27 August 2012 -- Summary

? The Board of Directors of Isconova AB (publ) ("Isconova" or "the Company") has resolved to undertake a new share issue of approximately SEK 50 million with preferential rights for the Company’s existing shareholders (the “Rights Issue”)

? The Rights Issue is subject to approval by an Extraordinary General Meeting to be held on 1 October 2012

? The purpose of the Rights Issue is to finance clinical trials in-house, increase production capacity and continued research in new indications for Matrix M™

? Shareholders representing 46.3 percent have committed to subscribe for their respective pro rata share of the Rights Issue. The remainder of the Rights Issue is guaranteed by a consortium of guarantors. Thus, the Rights Issue is fully guaranteed through subscription undertakings and guarantee commitments

Background and reasons

Isconova is a leading international vaccine adjuvant company. Isconova has deep knowledge of vaccine systems and the company develops vaccines together with partners in the human and veterinary field. The first veterinary vaccine using Isconova’s nanoparticle technology was launched in 2006. Isconova has a patented technology, a strong product platform, production and sales of adjuvants, and several collaborations with leading international vaccine and pharmaceutical companies. Isconova’s platform is currently used in seven veterinary vaccines on the market and in several projects within both human vaccines and veterinary vaccines in pre-clinical and clinical phases.

A fundamental component of Isconova’s strategy is to increase ownership of partners’ vaccine projects and to compile its own clinical documentation. Clinical data are the most important factor for Isconova to further validate its technology, become an increasingly attractive partner and being able to execute future agreements on premium terms. Isconova’s own human clinical studies are positive and promising. In May 2012, results from a successful phase 1 study of Matrix M™´s improvement of the efficacy of seasonal influenza vaccines were published. Isconova’s ambition is that the existing clinical studies shall enable new partnership agreements. Furthermore, Isconova intends to start a number of new clinical studies. A significant portion of the proceeds of the Rights Issue will be used to fund these studies.

Isconova produces its adjuvants in-house at its facility in Uppsala. In order to prepare for future studies and collaborations, Isconova intends to enhance its production facilities. Part of the proceeds will be used to scale up production resources, and to ensure customers, partners and authorities of continued compliance with the high technical and regulatory requirements for its production.

Isconova’s proprietary and patented Matrix M™ platform has the potential to be used in many different immuno stimulating indications. Isconova intends to actively document new indications for Matrix M ™, which will be financed with a portion of the proceeds.

In view of the financial needs listed above, Isconova’s Board of Directors has decided to conduct a rights issue with preferential rights to existing shareholders, which will provide the Company with approximately SEK 50 million before transaction costs. It is the Board of Directors’ view that the Company’s current strategy and ongoing activities, combined with the impending capital raising, will create possibilities to exploit the Company’s opportunities.

The Rights Issue

The Board of Directors of Isconova has on 26 August 2012 resolved, subject to the Extraordinary General Meeting’s approval, on the Rights Issue of approximately SEK 50 million with preferential rights for the Company’s existing shareholders in proportion to their share holdings as of the record date 9 October 2012. Shareholders will receive two (2) subscription rights per registered share. For subscription of one (1) new share, one (1) subscription right is required. The subscription price is SEK 6.00 per share.

With the Rights Issue, the Company's share capital will be increased by a maximum of SEK 8,316,904 by the issue of a maximum of 8,316,904 shares. The share capital may thus increase from SEK 4,158,452 to a maximum of SEK 12,475,356 and the number of shares of the Company from 4,158,452 shares to a maximum of 12,475,356 shares.

If not all shares are subscribed for through the exercise of preferential rights, the Board of Directors shall, within the limit of the highest amount of the Rights Issue, decide on allotment of shares without the exercise of preferential rights, whereby such shares shall firstly be allotted those who have subscribed for shares exercising subscription rights, regardless whether they were shareholders on the record date, pro rata in relation to the number of subscription rights that each one has exercised for subscription, and secondly be allotted to others who have subscribed for shares without subscription rights, pro rata in relation to the number of shares they have applied for. To the extent that the allotment cannot be made pro rata according to the above, it will be made by the drawing of lots. Thirdly, allotment will be made to those guarantors who have guaranteed the Rights Issue pro rata in relation to their commitments.

The subscription period runs from and including 15 October 2012 up to and including 29 October 2012, or such later date decided by the Board of Directors.

Subscription of shares by the exercise of subscription rights shall be made through simultaneous cash payment. Subscription of shares without the exercise of subscription rights shall be made on a separate subscription list and subscribed shares shall be paid in cash no later than three (3) banking days after the notice of allotment has been sent to the subscriber. The new shares will entitle to dividends for the first time on the record date of the dividend that takes place closest after the Rights Issue has been registered by the Swedish Companies Registration Office (Bolagsverket).

The Rights Issue is subject to approval by an Extraordinary General Meeting that will be held on 1 October 2012 (the EGM notice will be announced separately). The Rights Issue requires, and is conditional upon, that the Company’s Articles of Association are changed as regard to share capital and number of shares. The Board of Directors has therefore, as part of the Rights Issue, resolved to propose at the Extraordinary General Meeting changes to the Articles of Association in accordance with the above.

Subscription undertakings and guarantee commitments

Shareholders, including InnKap 4 Partners LP, who together control 46.3% of the shares and votes in the Company have undertaken to subscribe for their respective pro rata share of the Rights Issue and to vote in favour of the Rights Issue at the Extraordinary General Meeting. Furthermore, Bo Håkansson, LMK Ventures AB, Maxator Holding AB, SSE Capital, Shaps Capital AB, APS Capital AB and Staffan Bohman have signed guarantee commitments to subscribe for the shares in the Rights Issue that may not have been subscribed for with or without subscription rights.

This means that the Rights Issue is fully guaranteed by subscription undertakings and guarantee commitments.

Preliminary time table

1 October 2012 The Extraordinary General Meeting approves the Rights Issue

5 October 2012 First day of trading in the share without the right to participate in the Rights Issue

9 October 2012 Record date, i.e. registered shareholders will obtain subscription rights that give the right to participate in the Rights Issue

15 October–24 October 2012 Trading in subscription rights

15 October–29 October 2012 Subscription period

Approximately 2 November 2012 The outcome of the Rights Issue is announced Second half of November 2012 The Rights Issue is completed and registered with the Swedish Companies Registration Office (Bolagsverket)

Advisors

Pareto Öhman AB is financial advisor and Advokatfirman Lindahl KB is legal advisor to Isconova in connection with the Rights Issue.

For further information, please contact

Sven Andréasson, President, +46 701 60 60 60

This press release contains information that Isconova is required to announce pursuant to the Swedish Securities Market Act (2007:528). The information was submitted for publication (approximately) 08.00 AM on 27 August 2012.

About Isconova

Isconova AB is a leading international vaccine adjuvant company. Isconova has deep knowledge of vaccine systems, and the company develops vaccines together with partners in the human and veterinary markets. The first vaccine using Isconova’s nano-particle Matrix technology, Equilis®Prequenza, was launched on the veterinary market in 2006. In the human market a number of

vaccines are under development with Isconova’s third generation nano-particle, Matrix M™. Isconova’s partners include J&J/Crucell, Pfizer, Merck & Co., The Jenner Institute, Genocea and Evolva. The Company is headquartered in Uppsala, Sweden. Isconova AB was listed on NASDAQ OMX First North (ticker: ISCO) in November 2010. www.isconova.com.

IMPORTANT INFORMATION

This press release is not an offer or solicitation to acquire shares in Isconova. A prospectus relating to the Rights Issue referred to in this press release will be filed with the Swedish Financial Supervisory Authority (FI). After approval and registration of the prospectus by the Swedish Financial Supervisory Authority, the prospectus will be published and made available on inter alia Isconova’s website. This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as amended. Isconova does not intend to register any portion of the offering of the securities in the United States or to conduct a public offering of the securities in the United States. The information in this press release may not be announced, published or distributed, directly or indirectly, to the United States, Canada, Australia, Singapore, South Africa, Switzerland, Japan or Hong Kong or in any other jurisdiction where the announcement, publication or distribution of the information would not comply with applicable laws and regulations.



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