On the 22nd of December 2017, FIT Biotech Oy entered into a EUR 10 million financing agreement with Alpha Blue Ocean (ABO), the London-based investment manager. The deal would be presented to FIT Biotech Oy’s shareholders for approval at an Extraordinary Shareholders Meeting held no later than February 2018. Overall, the deal is expected to be worth EUR 10 million in share loan financing and commitment fee-related shares. [1:boldparag+parag1]
During the meeting to finalise the agreement, the Board of Directors of FIT Biotech decided to draw down a tranche of EUR 500,000 and handed ABO a number of the company’s K shares as commitment fee. With the drawing down of the first tranche, FIT Biotech’s equity became positive at the end of December. Early in the month, the company had announced negative equity at the end of November amounting to EUR 109,600.
According to the agreement, FIT Biotech can draw down convertible notes in 20 sequential phases over a duration of 30 months, with each phase allowing EUR 500,000 to be drawn. Drawing down can be terminated after the sixth tranche has been drawn. Every tranche has convertible notes issued, which can be converted into Class K shares using a valuation method and technical process elaborated in the financing agreement.
For Alpha Blue Ocean, the drawdown of a tranche entitles it to subscribe for Class K shares that are valued based on the market value of these shares at the time the share warrants are issued. The total number of K shares that can be subscribed under the warrants will depend on ABO’s desire to subscribe and invest in the shares as well as their value in public trading. ABO’s use of the share warrants to subscribe for the K shares would result in a positive effect for Fit Biotech’s equity and cash flow.
Pierre Vannineuse, Founder and Chief Executive Officer (CEO) of Alpha Blue Ocean, highlighted the confidence that ABO had in FIT Biotech’s management team when entering into the partnership. He also noted that ABO had committed itself in financing biomedical companies with highly innovative solutions across the globe. Then-CEO of FIT Biotech, James Kuo, appreciated the partnership for its ability to help the company commercialise its gene-based platform technologies.
Alpha Blue Ocean is an investment manager to a family of funds. The firm manages close to $300 million in assets, much of which has been gained through the provision of flexible, non-invasive debt and equity financing to companies around the world in sectors such as technology, mining, energy and healthcare. In addition to London, ABO also has offices in Geneva, Switzerland.
About FIT Biotech
FIT Biotech is a biotechnology company that is focused on developing innovative antibody gene delivery technologies and gene vaccines that can be used in the prevention and treatment of diseases such as HIV and some types of cancers. The company has more than two decades of experience in scientific research that has helped it develop a competitive edge in patented GTU® gene delivery technology. This experience allows FIT Biotech to develop drug candidates that are superior in quality and can be used in different applications.
The gene-based antibody therapies that FIT Biotech produces have been introduced into the market as protein products that are cheaper, more effective, and better accepted among patients since the human body will produce the antibodies. The development of gene-based therapies will replace injectable proteins and enable the delivery of the gene solution to patients. In time, the company plans to license the drug candidates to partners capable of going further in clinical development and commercialisation of the treatments. For more information on how gene therapies work, check out the attached PDF.