Pharnext raises $8.7 million after share issuance

The biopharmaceutical company Pharnext is carrying out a capital increase of approximately $8.7 million (€7.7 million) through the issue of 1,799,061 new ordinary shares to each of which a share subscription warrant (ABSA) is attached. This capital increase was subscribed mainly by existing shareholders, as well as by new institutional investors in the U.S. and members of Pharnext’s management, including the Chief Executive Officer and the Chief Financial Officer.

The proceeds from the capital increase will provide the company with the additional resources necessary to fund its activities over the next 12 months, including the finalization of the Phase 3 study protocol and other regulatory requirements for the development of PXT3003 in the treatment of Charcot-Marie-Tooth disease type 1A with the U.S. Food and Drug Administration and the European Medicines Agency.

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The issue price of an ABSA amounts to $4.85

The ABSAs were placed, with the cancellation of the shareholders’ preferential subscription right (DPS), by means of a private placement with qualified investors and a capital increase for the benefit of investors.

The issue price of an ABSA amounts to $4.85 (€4.28), including the issue premium, reflecting a 12.30% facial discount compared to the weighted average share price over the last 3 trading sessions. The issue price of an ABSA, including the theoretical value of a warrant (BSA), reflects a total discount of 29.92% compared to the 3-day VWAP.

Terms of the warrants

A BSA is attached to each new share. Four BSAs give the right to subscribe to 3 new ordinary shares of the company, at a price of $6.30 (€5.56) per share. The warrants may be exercised at any time during a period of 42 months from their issue. In the event that all the BSAs are exercised, a total number of 1,349,298 new additional ordinary shares of the company would be issued, representing a total amount of approximately $8.5 million (€7.5 million).

The theoretical value of each BSA, assuming volatility of 45% and based on the closing price on March 4th, 2020, amounts to $0.97 (€0.86). The warrants will be immediately detached from the New Shares as soon as they are issued and will not be listed.

Following the issue of the ABSAs, the company’s share capital will amount to $192,710 (€170,303), i.e. 17,030,328 ordinary shares, each with a par value of $0.01 (€0.01), representing approximately 111.81% of the company’s existing share capital.

CB LUX Sàrl, holding respectively 16.85% and 23.36% of the share capital of Pharnext

Lohas Sàrl, a company controlled by a member of the board of directors of the company in the person of Pierre Bastid, and CB LUX Sàrl, holding respectively 16.85% and 23.36% of the share capital of Pharnext prior to the completion of the fundraising, will hold respectively 19.18% and 24.32% of the share capital of the company.

Daniel Cohen, Chief Executive Officer of the company, and Peter Collum, Chief Financial Officer of the company, subscribe to the capital increase. Following the completion of the capital increase, they will hold respectively 3.77% and 0.14% of the share capital.

The admission of the New Shares to trading on the Euronext Growth market in Paris is scheduled to take place at the time of settlement and delivery, which is expected to occur on or about March 11th. They will be listed on the same trading line as the company’s existing ordinary shares.

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(Featured image by Louis Reed via Unsplash)

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