• First drawdown of EUR 5 million in nominal value to strengthen short-term cash position
• Financing subject to the approval of TxCell’s shareholders EGM on August 1, 2016
Valbonne, France, June 17, 2016 – TxCell SA (the “Company” – FR0010127662 – TXCL), a biotechnology company developing innovative, personalized cellular immunotherapies using regulatory T cells (Treg) to treat severe chronic inflammatory and autoimmune diseases, today announces the implementation of a new financing contract through the issuance of notes convertible into shares (the “Notes” or “OCA”) with share subscription warrants attached (the “Warrants” or “BSA”) (together the “Notes With Warrants” or “OCABSA”), allowing a potential fundraising of up to EUR 20 million (with an additional potential EUR 10 million should all warrants be exercised).
This financing is secured by YA II CD, LTD (the Investor), an investment fund managed by the US management firm Yorkville Advisors Global LP, and aims to strengthen TxCell’s financial position. The tranches will be at TxCell’s sole discretion, subject to certain conditions[1].
The effective implementation of this financing is subject to the approval of TxCell’s shareholders, through an Extraordinary General Meeting (EGM) to be convened on August 1, 2016. Subject to the shareholder approval, the Investor has agreed, as per the contract signed on June 17, 2016, to subscribe to Notes With Warrants for an amount of EUR 5 million in nominal value shortly after the EGM approval.
“The Notes With Warrants proposed by Yorkville represent the most appropriate financing option for TxCell in the current market conditions,” said Raphael Flipo, Chief Financial Officer of TxCell. “The first short-term drawdown, which has already been agreed with Yorkville for a total amount of EUR 5 million in two tranches, will enable TxCell to ensure the financing of its non-clinical research activities over the next 12 months. However, this first drawdown does not cover in full our financing needs, in particular the financing of the Phase IIb clinical study for Ovasave(R) in Crohn’s disease, CATS29, which should cost approximately EUR 15 million over two years. We are therefore looking into several financing options to fund the Company’s clinical programs.”
Objective of the transaction
This financing aims at strengthening TxCell’s cash position and at providing TxCell with resources to finance its current expenses over the next 12 months, it being specified that TxCell does not plan to request in the near future any drawdown of the equity line implemented with Société Générale in December 2015, and not used to this date.
Legal framework of the transaction
Subject to the approval of TxCell’s EGM convened on August 1, 2016, TxCell’s Board of Directors will issue 200 warrants (the “Tranche Warrants”) giving access to Notes With Warrants (OCABSA). 30 Tranche Warrants will be exercised immediately upon issuance by the Investor, and 20 Tranche Warrants will be exercised after 3 months, together resulting in a drawdown of €5 million in nominal value (plus EUR 2.5 million should the attached warrants be exercised).
Altogether, taking into account the remaining 150 Tranche Warrants, the maximum issuance could thus reach a total equity contribution of EUR 30 million: EUR 20 million resulting from the conversion of all the Notes into shares and EUR 10 million resulting from all the attached warrants being exercised.
It being specified that the Tranche Warrants have been fully subscribed by YA II CD, LDT, an investment fund managed by the US management firm Yorkville Advisors Global LP, within an issuance reserved to a designated person.
The terms and conditions of this transaction, the main characteristics of each financial instrument, and TxCell’s and the Investor’s obligations are detailed as an appendix to the present press release.
As the case may be, this issuance may give rise to the filing of a prospectus with the AMF.
Indicative timetable
• August 1, 2016: TxCell EGM to vote on the resolution authorizing the issuance of Notes With Warrants reserved to the Investor.
• August 3, 2016, at the latest: TxCell’s Board of Directors to formally issue Tranche Warrants for the benefit of the Investor and drawdown of first tranche of €3 million.
• November 3, 2016 : drawdown of second tranche of €2 million.
TxCell will issue a press release upon issuance of the 200 Tranche Warrants.
Forthcoming financial events
• July 27, 2016 (post market): Second quarter 2016 revenue and cash position.
• September 27, 2016 (post market): Half-year 2016 financial results.
About TxCell – www.txcell.com
TxCell is a publicly listed biotechnology company that develops platforms for innovative, personalized T cell immunotherapies for the treatment of severe chronic inflammatory and autoimmune diseases with high unmet medical need. TxCell is the only clinical stage cellular therapy company dedicated to the science of regulatory T lymphocytes (Tregs). Tregs are a recently discovered T cell population for which anti-inflammatory properties have been demonstrated. Ovasave(R), TxCell’s lead product candidate, is currently in a phase IIb clinical trial in refractory Crohn’s disease patients. Col-Treg, its second product candidate, is in preclinical development for the treatment of autoimmune uveitis. Based in Sophia-Antipolis, France, TxCell is listed on Euronext Paris and currently has 50 employees.
