Cynapsus Therapeutics Completes $25,000,000 Short Form Prospectus Offering
Marketwired, April 15, 2014
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TORONTO — Cynapsus Therapeutics Inc. (CTH: TSX-V and CYNAF: OTCQX) is pleased to announce that it has completed its previously announced short form prospectus offering (the "Offering") of units ("Units") for the maximum aggregate gross proceeds of $25 million (the "Offering"). Cynapsus intends to use the net proceeds from the Offering to complete the U.S. clinical development of its Parkinson’s drug candidate, APL-130277. APL-130277 is an easy-to-administer, fast-acting reformulation of apomorphine, which is the only approved drug (in the United States, Europe, Japan and other countries) to rescue Parkinson’s patients from “off” episodes.
Anthony Giovinazzo, President and Chief Executive Officer of Cynapsus stated: “We are pleased that Cynapsus attracted a significant amount of capital, including from a group of sophisticated biotech institutional investors. The completion of the Offering will remove short term capital risk considerations for the Company, and allow it to complete the CMC and clinical development work for APL-130277 in the United States. We believe the institutional investor support for the Offering confirms the results of our research to date, the validity of the 505(b)(2) regulatory path we pursuing for APL-130277, and the value of the APL-130277 product for patients with Parkinson’s disease, if approved.”
“I am also pleased to announce that Dexcel Pharma, an international specialty pharmaceutical company and current significant shareholder, has invested a further $4 million in Cynapsus,” continued Mr. Giovinazzo. “Dexcel brings significant expertise and experience in drug reformulations, approvals, commercialization and distribution, as well as in the U.S. FDA 505(b)(2) regulatory pathway, which Cynapsus will be pursuing for APL-130277. The proceeds of the Offering will allow us to fund our research and development for the next two years, and is expected to lead to the filing of a U.S. New Drug Application in 2016. During this time, we believe that achievement of our milestones and continued focus may attract significant attention and perceived value creation from our shareholders and potential partners.”
Pursuant to the Offering, the Company issued an aggregate of 38,461,538 Units (each, a “Unit”, and collectively, the “Units”) at a price of $0.65 per Unit for gross proceeds of $25,000,000. Each Unit consists of one common share (a “Common Share”) in the capital of the Company and one common share purchase warrant (a “Warrant”) of the Company. The Units immediately separated on closing into Common Shares and Warrants.
Each Warrant entitles the holder to purchase one Common Share (a “Warrant Share”) at a price equal to $0.81 per Warrant Share for a period of 60 months after the closing of the Offering, except that, subject to certain exceptions, the Warrants will be cancelled if they are not exercised within 30 days after written notice from the Company that the closing price of its Common Shares on the principal stock exchange of the Company has been $1.95 per Common Share or more for 20 consecutive trading days.
The net proceeds of the Offering will be used to fund research and development activities for the Company’s APL-130277 Parkinson’s disease drug candidate and for general working capital purposes.
The Offering was led by M Partners Inc. (the “Agent”) and Noble Financial Capital Markets (the “U.S. Agent”). The Company paid to the Agent a work fee in the amount of $65,500, plus HST, and has agreed to reimburse the Agent and the U.S. Agent for certain expenses incurred in connection with the Offering. In addition, the Company paid to the Agent and U.S. Agent cash commissions equal to a total of 7% of the Offering, and issued 2,676,923 non-transferable compensation warrants, each exercisable to purchase one Common Share on the same terms as the Warrants issued in the Offering.
Related Party Transaction
Dexcel Pharma, a strategic pharmaceutical investor and significant shareholder of Cynapsus, subscribed for 6,153,846 Units having an aggregate subscription price of $4,000,000, resulting in post-transaction ownership of 17.5% and 19.3% of all the issued and outstanding Common Shares on a basic and fully diluted basis, respectively. The Company has determined that exemptions were available with respect to the issuance of the Units to Dexcel from the formal valuation and minority shareholder approval requirements of Policy 5.9 of the TSX Venture Exchange and Multilateral Instrument 61-101 (“Protection of Minority Security Holders in Special Transactions”) of applicable Canadian securities laws.
This press release does not constitute an offer to sell or a solicitation to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities law and may not be offered or sold to, or for the account or benefit of, persons in the United States or “U.S. persons”, as such term is defined in Regulation S under the U.S. Securities Act unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration requirements is available.
Neither the TSX Venture Exchange nor the OTCQX International has passed upon the merits of the Offering or approved or disapproved the contents of this press release.
About Cynapsus Therapeutics
Cynapsus is a specialty pharmaceutical company developing a convenient and easy to use sublingual (oral) thin film strip for the acute rescue of “off” motor symptoms of Parkinson’s disease. Cynapsus’ drug candidate, APL-130277, is an easy-to-administer, fast-acting reformulation of apomorphine, which is the only approved drug (in the United States, Europe, Japan and other countries) to rescue patients from “off” episodes. Cynapsus is focused on maximizing the value of APL-130277 by completing pivotal studies in advance of a New Drug Application (“NDA”) expected to be submitted in 2016.
Over one million people in the U.S. and an estimated 4 to 6 million people globally suffer from Parkinson's disease. Parkinson’s disease is a chronic and progressive neurodegenerative disease that impacts motor activity, and its prevalence is increasing with the aging of the population. Based on a recent study and the results of the Corporation’s Global 500 Neurologists Survey, it is estimated that between 25 percent and 50 percent of patients experience “OFF” episodes in which they have impaired movement or speaking capabilities. Current medications only control the disease’s symptoms, and most drugs become less effective over time as the disease progresses.
More information about Cynapsus (TSX-V: CTH) (OTCQX: CYNAF) is available at www.cynapsus.ca and at the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
Forward Looking Statements
This announcement contains "forward-looking statements" within the meaning of applicable securities laws. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Cynapsus to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks and uncertainties relating to Cynapsus’ business disclosed under the heading “Risk Factors” in its March 26, 2014, Annual Information Form and its other filings with the various Canadian securities regulators which are available online at www.sedar.com. Although Cynapsus has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Cynapsus does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.