Placing and Subscription to raise up to £0.65 million and Notice of General Meeting

THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF IRELAND, THE REPUBLIC OF SOUTH AFRICA, OR JAPAN OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. THIS ANNOUNCEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY ORDINARY SHARES OF VENN LIFE SCIENCES HOLDINGS PLC IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

Venn Life Sciences Holdings Plc

(“Venn” or the “Company” or “the Group”)

Placing and Subscription to raise up to £0.65 million

and Notice of General Meeting

Venn Life Sciences (AIM: VENN), an Integrated Drug Development Partner offering a combination of drug development expertise and clinical trial design and management to pharmaceutical, biotechnology and medical device clients, announces it has conditionally raised up to approximately £0.65 million, before expenses, through the issue of an aggregate of up to 10,833,335 new Ordinary Shares (the “Fundraising”) at 6 pence per Ordinary Share.

The Fundraising comprises a conditional placing of 8,750,001 new Ordinary Shares, which has been arranged by Hybridan, and a conditional subscription for up to 2,083,334 new Ordinary Shares.  It is the intention of Allan Wood, the Company’s Chairman, and Mary Sheahan, a Non-Executive Director, to subscribe for, in aggregate, up to 916,667 of those new Ordinary Shares.

The New Ordinary Shares have been placed with, and subscribed for by, existing shareholders and directors of the Company and other investors.

The Fundraising is conditional upon, inter alia, the Company obtaining approval from its Shareholders to grant the Board authority to allot and issue the New Ordinary Shares and to disapply pre-emption rights in relation to such allotments, Admission becoming effective and the Placing Agreement made between, amongst others, the Company and Hybridan LLP becoming unconditional and not being terminated in accordance with its terms.

The Issue Price represents a discount of 9.4 per cent. to the closing middle market price of 6.62 pence per Existing Ordinary Share on 3 July 2018, being the last business day prior to the publication of this announcement.

Highlights

  • Up to £0.65 million raised by a conditional placing of 8,750,001 new Ordinary Shares and a conditional subscription for up to 2,083,334 new Ordinary Shares both at an issue price of 6 pence per Ordinary Share
  • The New Ordinary Shares will represent up to 15.2 per cent. of the Enlarged Share Capital
  • The market capitalisation of the Company immediately following the Placing and Subscription at the Issue Price will be £4,283,708.88 (assuming all of the Subscription Shares are issued)
  • A circular will be posted to Shareholders today, a copy of which will be available on the Company’s website www.vennlifesciences.com

Background to, and reasons for, the Fundraising

During the financial year ended 31 December 2017, the Company completed a strategic review of growth options for the Group’s business and concluded that it would leverage its current infrastructure, through delivering both organic and inorganic business growth.  The Board intends that inorganic growth will come from strategic acquisitions which extend both the Group’s footprint and service lines, consistent with the Company’s objective of positioning the business as full service and full coverage in Europe.

The Board believes that biostatistics plays an increasingly important role in trial design and that delivery of strong consulting capability in this area is likely to result in full clinical projects for Venn.  Venn currently generates more than €1 million annually in biostatistics income but does not have sufficient resources of its own to respond to new enquiries in this service line.  There are also scarce resources in the sector generally and this makes it difficult and expensive to find new hires to grow the service line organically.

The Company has therefore signed a letter of intent with CRM Biometrics GmbH (“CRM Biometrics”), a biostatistics business based in Germany, for its subsidiary, Venn Life Sciences Germany GmbH (“Venn Germany”), to acquire certain of the business and employees of CRM Biometrics as a route to expand the Group’s biostatistics capabilities.

Under the terms of the letter of intent, should the acquisition proceed, Venn Germany will acquire CRM Biometrics’ biostatistics team of five people which, based on standard industry calculations, the Board believes is capable of generating €0.75 million in annual revenue.  It will also acquire all of CRM Biometrics’ existing customer and supplier contracts.

The Group and CRM Biometrics share a key client which has significant upcoming studies to be awarded.  The Board believes that, as well as allowing the Group to expand its business in the critical biostatistics service line, the acquisition of CRM Biometrics’ business and employees will help secure future studies from this shared key client.

The consideration for the acquisition of CRM Biometrics will comprise a series of future contingent payments of, in aggregate, €200,000, payment of which will depend on the delivery of certain specified new projects.

Use of Proceeds

The Company expects to use the net proceeds of the Fundraising to fund a series of future contingent consideration payments for the acquisition by Venn Germany of certain of the business and employees of CRM Biometrics and for general working capital purposes.

Timetable of events                                                                                                                                             

The General Meeting at which the Resolutions will be proposed to implement the Fundraising will take place at midday on 20 July 2018 at the offices of Jeffreys Henry LLP, Finsgate, 5-7 Cranwood Street, London EC1V 9EE. Admission is expected to become effective and dealings in the New Ordinary Shares are expected to commence on AIM at 8.00 a.m. on 24 July 2018.

Fundraising Statistics

Number of Existing Ordinary Shares:60,561,813
Number of new Ordinary Shares being issued by the Company:up to 10,833,335
Number of Ordinary Shares in issue following Admission*:71,395,148
Issue Price per Ordinary Share:6 pence
Gross proceeds of the Fundraising*:Approximately £650,000
Estimated net proceeds of the Fundraising*:Approximately £600,000
Number of New Ordinary Shares as a percentage of the Enlarged Share Capital*:15.2 per cent.

Note:

* Assuming all of the Subscription Shares are issued.

Tony Richardson, CEO of Venn Life Sciences commented: “As biostatistics plays an increasingly important role in trial design and delivery of strong consulting capability in this area is likely to result in future full service projects for Venn, we are committed to the expansion of our capabilities in this area. We look forward to welcoming the CRM Biometrics team into Venn and to further developing our capabilities in this area. Venn currently generates more than €1 million annually in biostatistics income. The acquisition of CRM Biometrics brings clear synergies in the form of shared clients and further cross selling opportunities.”

Unless the context otherwise requires, defined terms used in this announcement will have the meaning as set out in the circular to be posted to Shareholders today, which will be available shortly on the Company’s website www.vennlifesciences.com.

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Contacts:

Venn Life Sciences Holdings PlcTel: +353 154 99 341
Allan Wood, Non-Executive Chairman
Tony Richardson, Chief Executive Officer
Cenkos (Nominated Adviser and Co-Broker)Tel: +44 (0) 20 7397 8900
Mark Connelly/Steve Cox (Corporate Finance)
Davy (ESM Adviser and Co-Broker)Tel: +353 1 679 6363
Fergal Meegan / Matthew DeVere White (Corporate Finance)
Paul Burke (Corporate Broking)
Hybridan LLP (Co-Broker)
Claire Louise NoyceTel: 020 3764 2341
Walbrook PR LtdTel: 020 7933 8780 or venn@walbrookpr.com
Anna DunphyMob: 07876 741 001
Paul McManusMob: 07980 541 893