Sydney, Australia, 15 December 2011 - Public unlisted drug development company Hunter Immunology today recommended shareholders accept the takeover offer from listed biotech Probiomics (ASX: PCC).
The Company’s four largest shareholders, respected funds manager Chris Cuffe, investment group Intersuisse Biosciences and co-founders Dr Philip Comans and Professor Robert Clancy, who together hold over 45 per cent of shares, have all indicated their intention to vote in favour of the transaction.
The reverse takeover bid announced by Probiomics in October offers nine Probiomics shares for each Hunter Immunology share.
The merged entity has indicated its intention to list on the ASX in March 2012 as a new drug development company with a market capitalisation of $37.7 million.
A formal Target’s Statement issued by Hunter Immunology said the proposed transaction would “combine two complementary businesses to create a new biotechnology and drug development company with multiple products and revenue streams.”
The new company will have the shareholder base and financial capacity to pursue other growth opportunities. Hunter Immunology is developing a promising new vaccine to treat people suffering Chronic Obstructive Pulmonary Disease (COPD) that includes chronic bronchitis and emphysema.
The vaccine is in the final stages of a 320 patient Phase IIb clinical trial to assess safety and efficacy. The trial results are due to be released in April 2012. An earlier Phase IIa clinical study involving 100 patients indicated a significant reduction in hospital admissions for patients with moderate to severe COPD.
Hunter Immunology Chief Executive Officer David Radford said, “A positive outcome from the trial in 2012 will expedite licensing and partnership discussions with a potential global pharmaceutical partners who will help us commercialise this promising new Australian treatment for the growing number of people worldwide who have few medical options.
“These discussions may take the form of a trade sale, licencing deal or joint venture, any of which would add significant value to the business. Management’s goal is the creation of solid, financially beneficial relationships with global pharmaceutical partner organisations to help expedite the commercialisation of our lead product.
“The Board believes the proposed reverse takeover and subsequent listing will provide greater liquidity to current shareholders and allow new shareholders to participate in our growth opportunities. It will reduce our risk profile by having more than one product” Mr Radford said.
The Board of the merged entity will include The board of the merged entity will comprise Mr. Ian Mutton (Chairman), Mr. David Radford (CEO and Non-Executive Director), Mr. Doug Wilson (Non-Executive Director), Mr. Jeremy Curnock Cook (Non-Executive Director), Mr. Glenn Crisp (Non-Executive Director) and Mr. Patrick Ford (Non-Executive Director).
Hunter Immunology CEO, David Radford, will be CEO of the new company. Mr Radford was recently CEO of Australian-based developer of infection control technology Nanosonics Limited (ASX: NAN) where he successfully secured a global marketing and distribution deal with GE Healthcare.
The new company will also seek to grow revenue and sales of Probiomics’ over the counter nutritional supplements, additives and pro-biotic products globally.
Summary of the transaction
All post takeover bid issued shares in Probiomics will be consolidated on a one for 20 (1:20) basis and options restructured accordingly.
Probiomics will issue approximately 2,703 billion pre consolidation Probiomics shares (on a pre Share Consolidation basis) - which will in turn be reduced to 135,163,415 new Probiomics shares (on a post Share Consolidation basis) - to Hunter Immunology shareholders.
Hunter Immunology shareholders will own about 89 per cent of the merged group with Probiomics shareholders diluted to 11 per cent of the new company.
Following the acquisition, Probiomics will raise up to $4.4 million from the issue of new ordinary shares at $0.22 cents per share after consolidation. Funds raised will be used to expedite commercial exploitation of merged entity’s intellectual property and working capital.
Completion of the acquisition and the Public Offer are conditional upon both Probiomics shareholder approval of a number of resolutions and the granting by ASX of readmission.
Full conditions are detailed in the Probiomics Prospectus and Target’s Statement.
The bid is subject to 90 per cent acceptances of Hunter Immunology shareholders, Probiomics shareholder approval, a successful public offer, readmission to the to the official list and no superior offer being made.
Background on COPD
COPD is a disease largely caused by smoking but with a rising number of new cases caused by pollution in developing countries like China. Global demand for COPD treatments is growing rapidly with an analysis by the Australian Lung Foundation in 2008 indicating the wide economic cost of to the Australian economy in 2010 was estimated to be $9 billion in direct and indirect costs, with $1 billion incurred in direct health system expenditure.
It has been estimated COPD will be third leading cause of mortality in the next decade, behind heart failure and cancer. COPD is Australia’s second leading cause of avoidable hospital admissions and eight per cent of Australians over age of 40 are affected with no current medical cure.
Background on Probiomics
Probiomics currently makes and sells consumer food supplements based on a proprietary probiotic compound called PCC. Probiotics are potentially beneficial bacteria which promote intestinal health.
The Company’s main product, ProTract, is recognised on the Australian Register of Therapeutic Goods and is sold as a treatment for intestinal health through chemists. Its other product Progastrim® is sold to treat gastrointestinal disorders. The Company has a global distribution agreement with Denmark’s Chr Hansen to manufacture, market, supply and distribute its proprietary probiotic strain in dietary supplements, over the counter drugs, sports nutrition, slimming products and dairy products.
For further information please contact:
At the Company
David Radford
CEO, Hunter Immunology
M: +61 (0)407 218922
Australian IR/PR
Tim Allerton or Andrew Geddes
City PR
T: +61 (0)2 9267 4511
International IR/PR
Sue Charles
College Hill
T: +44 (0)20 7866 7863
M: +44 (0)7968 726585 / +61 (0)466 924218
E: sue.charles@collegehill.com
