Placing and Open Offer
December 03 2003 - 2:01AM
UK Regulatory
RNS Number:7909S
BioProgress PLC
03 December 2003
Press Release 3 December 2003
BioProgress plc
("BioProgress" or the "Company")
Placing and Open Offer of 14,559,444 new Ordinary Shares at 50p per share
BioProgress plc, a provider of innovative delivery mechanisms for the
pharmaceutical oral dosage markets, announces today that the Company proposes to
raise approximately #6.6 million (net of expenses) by way of a Placing and Open
Offer of 14,559,444 new Ordinary Shares. The Placing and Open Offer is
underwritten by Collins Stewart.
Highlights
* raising #7.3 million before expenses
* the proceeds will be used to create a cGMP film production
capability in March, Cambridgeshire
* the Open Offer, qualifying ordinary shareholders may subscribe for
Offer Shares at 50p per share pro rata to their shareholdings on
the basis of 1 Offer Share for every 6 ordinary shares held
* underwritten by Collins Stewart.
Commenting on the Placing and Open Offer, Graham Hind, Chief Executive of
BioProgress plc, said:
"Since our flotation on AIM earlier this year the business has progressed well
and we continue to focus on the development of our technologies and their
delivery into the market place. A requirement of our proposed alliance with FMC
is that a pharmaceutical standard (cGMP) production source of the BioProgress
proprietary films is established. The establishment of a BioProgress film
facility would offer a number of advantages in addition to meeting our
obligations under the proposed FMC strategic alliance.
"It also means that we will have successfully dealt with our two main strategic
requirements, namely to appoint a high quality global pharmaceutical machine
manufacturer and to provide sources of pharmaceutical standard film on both
sides of the Atlantic. As a result, we view the outlook for the current and
forthcoming financial years with confidence."
For further information:
BioProgress plc
Graham Hind, Chief Executive Tel: +44 (0) 1354 655 674
grahamhind@bioprogress.com www.bioprogress.com
Collins Stewart
Paul Davies Tel: +44 (0) 20 7523 8309
pdavies@collins-stewart.com www.collins-stewart.com
Media enquiries:
Bankside
Henry Harrison-Topham / Heather Salmond Tel: +44 (0) 20 7444 4140
heather.salmond@bankside.com www.bankside.com
Overview of the Business
BioProgress is primarily involved in the development and commercialisation of
patents covering water soluble and biodegradable films and the process machinery
associated with the manufacture and end-use of such products. The films and
machines are marketed under the headline brand, XGEL(R).
The Company is focusing on high value applications for its technologies and is
developing new oral dosage forms under the XGEL(R) brand for the pharmaceutical
and dietary supplement markets. The films are used to replace the existing
gelatin based capsule or tablet coatings that traditionally have been used to
deliver pharmaceutical products and dietary supplements (such as vitamins) into
the human body. The Company believes that the XGEL(R) film system gelatin-free
soft capsule not only provides consumers with the choice of an animal-free soft
capsule, but its novel design is expected to deliver significant advantages in
the manufacturing process when compared to traditional encapsulation processes,
many of which may lead to a cheaper cost for the encapsulation process overall.
In addition to the XGEL(R) ingestible encapsulation products, the Company has
developed non-ingestible applications for products such as bath beads. The
Company has also developed a patented flushable and biodegradable ostomy pouch
and has licensed this technology exclusively to ConvaTec, a division of Bristol
Myers Company Inc., a global industry leader in this market.
Placing and Open Offer
The Company was admitted to trading on AIM in May 2003 and simultaneously raised
#5.0 million (before expenses) which was primarily used to finance the
commercialisation of the XGEL(R) film system. The Company has made considerable
progress since flotation in developing the Business. In particular, BioProgress
has:
* delivered its first two XGEL(R) TABWRAP(R) machine systems to
customers in August 2003. Both machines are small scale pilot
versions;
* completed the design and build of the first small scale pilot XGEL(R)
NROBE(R) machine which was delivered to Farmasierra in September 2003.
Farmasierra are currently carrying out a further development and
validation programme;
* executed a letter of intent to enter into a global strategic alliance
with FMC BioPolymer (a division of FMC Corporation Inc.). Negotiation
of binding agreements has commenced whereby FMC BioPolymer will
acquire an exclusive worldwide licence for the NROBE(R) dosage form,
process, equipment and enabling technologies and will be solely
responsible for the commercialisation of NROBE(R) systems and
associated films;
* signed a contract in October 2003 with Harro Hoefliger GmbH whereby
Harro Hoefliger is appointed as the exclusive builder, supplier and
service and warranty provider for all TABWRAP(R), SWALLOW, SEPTUM(R)
and NROBE(R) machines; and
* executed a letter of intent on 24 November 2003 with a major US
non-prescription pharmaceutical company(whose name must remain
confidential for commercial reasons) in respect of a transaction in
which the Company will grant a license for one of BioProgress' XGEL(R)
dosage forms in North America and the European Union.
Corporate transactions post flotation
The potential global strategic alliance with FMC Biopolymer presents a
significant opportunity for the Group. FMC Corporation Inc. is a US corporation
with a US $2 billion turnover and the FMC BioPolymer division, is a specialist
in excipient formulations and the supply of materials to the pharmaceutical
industry globally for the manufacture of medicines.
Providing the necessary scientific resources and infrastructure to effectively
market the NROBE(R) technology to the major pharmaceutical companies globally is
a challenging prospect. The Company believes that the proposed alliance with
FMC could bring expertise, pharmaceutical industry commercial contacts and
resources to the Group which would enable a faster and more effective commercial
rollout of the NROBE(R) technology.
A requirement of the alliance with FMC is that a pharmaceutical standard (cGMP)
production source of the BioProgress proprietary films is established. The
establishment of a BioProgress film facility would offer a number of advantages
in addition to meeting the obligations pursuant to the FMC strategic alliance.
In the opinion of the Company, it would:
* ensure that Group has control over the quality and supply of film
thereby increasing customer confidence;
* remove the current reliance upon third party manufacturers;
* enable the Group to develop and produce a new generation of
pharmaceutical standard film products; and
* enhance the margins of the Group on the ongoing supply of film.
The agreement executed with Harro Hoefliger in October 2003 is also an important
strategic alliance for the Group and provides comfort to existing and
prospective customers transferring their products into the Group's dosage forms.
Harro Hoefliger have a high quality machine design and build capability, a
global installation and service network and an impressive record of service with
most of the global pharmaceutical companies.
The name of the US pharmaceutical company with whom BioProgress executed a
letter of intent on 24 November 2003 must at this time remain confidential for
commercial reasons. It is a large company within its sector and influential
within the US non-prescription pharmaceutical market as a whole. The potential
benefits to BioProgress of this alliance are substantial in future revenue terms
but also as a validation and endorsement of the new BioProgress dosage form
technology. The provision of US based cGMP film capacity through this alliance,
in addition to the Group's own capacity in the UK, is also a major strategic
benefit for BioProgress and, in the opinion of the Company, will be seen as a
real advantage to existing and new customers in North America.
Use of Proceeds
The proceeds raised will be used to create a cGMP film production capability to
ensure BioProgress can meet the obligations required by the proposed strategic
alliance with FMC and also to meet the requirements of customers for the other
BioProgress technologies.
Current trading and prospects
The Company continues to focus on the development of its technologies and the
delivery of these technologies into the market place and more particularly the
expanding customer base which the Company has built up. BioProgress has been
encouraged by the progress currently being made in both the laboratory and the
negotiations for strategic alliances and partnerships. Accordingly, the Company
views both the outlook for the current and forthcoming financial years with
confidence.
Details of the Placing and Open Offer
BioProgress is proposing to raise approximately #7.3 million (#6.6 million net
of expenses), by the allotment and issue of 14,559,444 Offer Shares pursuant to
the Placing and Open Offer. The Offer Shares have been conditionally placed by
Collins Stewart with institutional investors, subject to clawback to satisfy
valid applications by Qualifying Shareholders under the Open Offer.
The Open Offer is made by Collins Stewart on behalf of BioProgress. Under the
Open Offer, Qualifying Ordinary Shareholders may subscribe for Offer Shares at
the Placing Price pro rata to their shareholdings on the Record Date on the
basis of:
1 Offer Share for every 6 Existing Ordinary Shares
held on the Record Date and so in proportion for any other number of Existing
Ordinary Shares then held.
Under the terms of the Articles, Qualifying Convertible Shareholders are
entitled to participate in the Open Offer. In accordance with the Articles, the
entitlement of each Qualifying Convertible Shareholder has been calculated by
reference to the notional holding of Ordinary Shares which such Qualifying
Convertible Shareholder would have held had he converted his Convertible Shares
in full immediately prior to the Record Date at the conversion rate then
applicable.
Accordingly, Qualifying Convertible Shareholders are being given the opportunity
to subscribe under the Open Offer for Offer Shares at the Placing Price, pro
rata to their number of notional Ordinary Shares on the basis of:
1 Offer Share for every 6 Ordinary Shares
notionally held by such Qualifying Convertible Shareholders at the close of
business on the Record Date (and so in proportion for any other number of
Ordinary Shares then notionally held).
Where appropriate, entitlements of Qualifying Shareholders will be rounded down
to the nearest whole number of Ordinary Shares and any fractional entitlements
to Offer Shares which would otherwise have arisen will be disregarded in
calculating Qualifying Shareholders' pro rata entitlements. Such fractional
entitlements will be aggregated and allotted to Placees under the Placing, with
the proceeds retained for the benefit of the Company. To the extent that the
Offer Shares are not taken up under the Open Offer they will fall to be allotted
to Placees under the Placing.
An irrevocable undertaking has been obtained from each of the Directors who
holds Ordinary Shares and certain shareholders not to take up their respective
entitlements under the Open Offer in respect of 2,519,354 Ordinary Shares in
aggregate, representing approximately 17 per cent of the new Ordinary Shares to
be issued under the Placing and Open Offer and, accordingly, Collins Stewart has
conditionally placed these shares firm.
The Offer Shares will, when issued, rank pari passu in all respects with the
Existing Ordinary Shares, including the right to receive all dividends and other
distributions declared, made or paid on or after, or by reference to a record
date on or after, the date of their issue and will be issued free of all liens,
charges and encumbrances It is expected that Admission will become effective and
dealings in the Offer Shares will commence on AIM on 31 December 2003.
The Placing and Open Offer are conditional, inter alia, upon; (i) the passing
(without material amendment) of the Resolution by the Shareholders at the EGM;
(ii) the Placing Agreement having become unconditional in all respects (save for
the condition relating to Admission) and not having been terminated in
accordance with its terms; and (iii) Admission becoming effective not later than
8.00 am on 31 December 2003 (or such later time and/or date as Collins Stewart
and the Company may agree in writing, being not later than 8.00 am on 7 January
2004).
Expected timetable of principal events
2003
Record Date for the Open Offer close of business on 1 December
Latest time and date for splitting of
Application Forms (to satisfy bona fide
market claims only) 3.00 pm on 22 December
Latest time and date for receipt of
Application Forms and payment in full
under the Open Offer 3.00 pm on 24 December
Latest time and date for receipt of
Forms of Proxy 11.00 am on 27 December
Extraordinary General Meeting 11.00 am on 29 December
Dealings in the Offer Shares expected to
commence on AIM 8.00 am on 31 December
CREST member accounts credited 31 December
2004
Expected date of dispatch of definitive
certificates (where applicable) By 7 January
Availability of the admission document
Copies of the admission document dated 3 December 2003 are available free of
charge from the Company's registered office and at the offices of Collins
Stewart, 88 Wood Street, London, EC2V 7QR, during normal business hours on any
weekday (Saturdays, Sundays and public holidays excepted) and will remain
available for at least one month after Admission.
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
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