Disposal
March 06 2009 - 2:00AM
UK Regulatory
TIDMNIM
RNS Number : 4240O
Norwood Immunology Ld
06 March 2009
Norwood Immunology Limited
Disposal of Bestewil
Introduction
Further to the announcement dated 5 December 2008 in which the Directors stated
that Norwood had signed a letter of intent to sell Bestewil, Norwood today
announces the proposed disposal of its wholly owned subsidiary Bestewil (and its
subsidiary, V.B.) to Mymetics. Further details of the Disposal are set out
below.
Background to the Disposal
Bestewil was acquired by the Company in November 2006 as part of an expansion
plan that aimed to combine Virosome Biological's complementary technology with
the Company's core technology for rejuvenation of the adult immune system. Post
acquisition, the enlarged group had combined research capabilities, a joint
intellectual property portfolio and a suite of clinical trials.
Given the Company's current financial position, the Directors consider the
realisation of value for the Company's core asset to be essential to Norwood's
continued long term strategy to develop and commercialise technology in the
field of immunology.
Importance of vote
Note 3 to the financial statements of the Company and the Group for the year
ended 30 June 2008 sets out the going concern basis and included the following
statement:
"To continue as a going concern the Company requires the continued support of
its loan note holders and shareholders, or to raise new facilities or equity
from other parties or to realise assets to provide the necessary cash for the
business to continue to trade. In the light of the current environment in world
capital markets, the directors have concluded that realisation of group assets
is the most appropriate route to ensure that capital is available to continue as
a going concern.
As announced on 6 December 2008, the Company has now entered into a non-binding
Letter of Intent (LOI) with a NASDAQ listed international biotechnology company
focused on developing innovative vaccines interfering with early pathogen
transmission events, for the sale of 100% of the Company's interest in Bestewil
Holding B.V, the immediate holding company of Virosome Biologicals B.V. In
connection with the execution of this LOI and the granting of a period of
exclusivity to the NASDAQ company to 31 January 2009, the Company has received a
non refundable goodwill deposit of EUR100,000.
The consideration proposed under the LOI includes cash on completion, the issue
to the Company of a secured loan note by the acquirer, milestone payments due on
successful development of the Virosome Biologicals' technology, share options in
the NASDAQ company and a share in the ongoing income streams of certain of
Virosome Biologicals' vaccine development programmes. The initial cash
consideration would be sufficient to fund the remaining operations of the group
for at least 12 months from the date of the accounts. There are a number of
uncertainties as to the completion of the sale, including the signing of a
legally binding sale agreement, the potential acquirer raising the necessary
finance and the approval of the sale by the Company's shareholders. However,
the directors have a reasonable expectation that the proposed transaction will
be completed on the basis that the Company has a signed Letter of Intent with
the NASDAQ company, has been paid an exclusivity fee of EUR 100,000 in connection
with the transaction, has received a draft Sale and Purchase Agreement, their
discussions to date with the NASDAQ company's management and their discussions
with the Company's major shareholders.
These financial statements have therefore been prepared on a going concern basis
which contemplates the continuity of normal business activities and the
realisation of assets and settlement of liabilities in the ordinary course of
business.
In the event that the Company is unable to complete the present sale
transaction, there is material uncertainty whether the Company can continue as a
going concern. If the Company is unable to continue as a going concern, it may
be required to realise its assets and extinguish its liabilities other than in
the normal course of business and at amounts different to those stated in the
financial statements."
If Shareholders do not approve the Disposal, the Directors believe that the
Company will not be able to meet its current commitments and may have to
consider ceasing to trade forthwith.
Information on Bestewil
Bestewil owns all of the issued share capital of V.B. V.B. engages in the
development and commercialisation of vaccines based on adjuvanted virosomes.
Both companies are incorporated and based in the Netherlands. .V.B.'s adjuvanted
virosome technology is licensed to Solvay (a research driven group of companies
that constitute the global pharmaceutical business of Solvay Group) in the field
of intranasal influenza vaccines.
The financial information of Bestewil set out below has been extracted from
Bestewil's unaudited annual financial statements for the period ended 30 June
2008.
+------------------------------------+--------------------+--------------------+
| | 18 months ended | 12 months ended |
| | 30 June 2008 | 31 December 2006 |
| | Unaudited | Unaudited |
+------------------------------------+ + +
| | | |
+------------------------------------+--------------------+--------------------+
| | EUR | EUR |
+------------------------------------+--------------------+--------------------+
| Profit & Loss | | |
+------------------------------------+--------------------+--------------------+
| Turnover | 235,960 | 746,994 |
+------------------------------------+--------------------+--------------------+
| Gross profit | 235,960 | 707,167 |
+------------------------------------+--------------------+--------------------+
| Profit/(loss) before taxation | (734,424) | 57,719 |
+------------------------------------+--------------------+--------------------+
| Profit/(loss) after taxation | (731,416) | 54,287 |
+------------------------------------+--------------------+--------------------+
| | | |
+------------------------------------+--------------------+--------------------+
| Balance sheet | | |
+------------------------------------+--------------------+--------------------+
| Fixed assets | 126,129 | 8,887 |
+------------------------------------+--------------------+--------------------+
| Current assets | 369,535 | 647,285 |
+------------------------------------+--------------------+--------------------+
| Current Liabilities | 746,926 | 176,020 |
+------------------------------------+--------------------+--------------------+
| Net assets/(liabilities) | (251,262) | 480,152 |
+------------------------------------+--------------------+--------------------+
Terms of Disposal
Under the terms of the SPA, Norwood has agreed to sell, subject to Shareholder
approval, the entire issued share capital of Bestewil to Mymetics for the
following consideration to be settled at completion of the SPA:
* cash consideration of EUR5 million,
* EUR2.5 million of convertible and redeemable Loan Note (convertible at the
Conversion Price), repayable 36 months after issue with an interest rate of 5%,
accruing until date of repayment; and
* options with a value of approximately US$9.6 million over Mymetics shares .
Further consideration to be paid after completion of the SPA is as follows:
* payment of up to EUR3 million of cash on the event of Solvay commencing a Phase 3
clinical trial in its intranasal influenza vaccine;
* payment of up to EUR2.8 million of cash on the event of a license agreement being
signed with a third party to access Bestewil intellectual property and know how
in the field of RSV (Respiratory Syncytial Virus) ("RSV Licence");
* a 50% share of net royalties received by Mymetics from a RSV License, payable in
cash; and
* a 25% share of any net amounts received by Mymetics from a third party HSV
(Herpes Simplex Virus) License based upon Bestewil intellectual property
payable in cash.
Completion of the SPA is due to take place as soon as reasonably practicable
after Shareholders have approved the Disposal.
Future Strategy
The core Norwood strategy is to generate revenues and ultimately profitability
via the development and commercialisation of its technologies and intellectual
property which are currently associated with (a) the provision of stem cell
services and therapies, (b) licensing and partnerships for intellectual property
and therapies based on stem cells and the immune system; and (c) the immune cell
targeting of vaccines using adjuvanted virosomes.
Norwood has out-licensing arrangements with Abbott Laboratories (USA) and Solvay
for two of its core technology platforms and is in a period of exclusive
collaboration with MedImmune LLC for its RSV virosomal vaccine candidate.
The aims of the Board in the near term is to secure the future of the
Company through the divestment of its virosomal vaccine development business and
thereafter to create shareholder value via the possible development and
provision of both veterinary and human stem cell banking and processing
services, as well as the possible provision of veterinary and human stem cell
(and immunology based) clinical therapies. In this regard, Norwood is currently
evaluating the commercial opportunities flowing from the potential provision of
stem cell processing services as well as the provision of stem cell therapies -
initially in the veterinary setting. The aim is to develop revenue producing
stem cell technologies in the near term.
Circular, Annual Report & Accounts and Suspension from Trading
The Disposal will result in there being a fundamental change in Norwood's
business under the AIM Rules and, therefore, requires Shareholder approval. A
circular setting out details of the Disposal is expected to be sent to
Shareholders during the week commencing 9 March 2009. Further, the Directors
expect that the Company's Annual report and Accounts for the year ended 30 June
2008 are expected to be sent to Shareholders at the same time as the circular,
together with details of the Company's Annual General Meeting and that
suspension of trading of the Company's ordinary shares on AIM will be lifted
thereafter.
Enquiries:
+---------------------------------------+---------------------------------------+
| Norwood Immunology | +44 (0) 7860 295153 |
+---------------------------------------+---------------------------------------+
| Richard Williams, Chief Executive | |
| Officer | |
+---------------------------------------+---------------------------------------+
| | |
+---------------------------------------+---------------------------------------+
| KBC Peel Hunt Ltd (NOMAD & Broker) | +44 (0) 20 7418 8900 |
+---------------------------------------+---------------------------------------+
| Capel Irwin | |
+---------------------------------------+---------------------------------------+
| David Anderson | |
+---------------------------------------+---------------------------------------+
Expected timetable of principal events
+------------------------------------------------+------------------------------+
| Latest time and date for receipt of Form of DI | 09.00 a.m. on 29 March 2009 |
| Instruction | |
+------------------------------------------------+------------------------------+
| Latest time and date for receipt of Forms of | 09.00 a.m. on 30 March 2009 |
| Proxy | |
+------------------------------------------------+------------------------------+
| Extraordinary General Meeting | 09.00 a.m. on 1 April 2009 |
+------------------------------------------------+------------------------------+
Annual General Meeting09.30 a.m. on 1 April 2009
All times referred to in this circular refer to the time observed in Melbourne,
Australia.
Definitions
The following definitions apply throughout this announcement unless the context
requires otherwise:
+---------------------------------------+---------------------------------------+
| "Board" or "Directors" | the Directors of Norwood |
| | |
+---------------------------------------+---------------------------------------+
| "Bestewil" | Bestewil Holding B.V, the owner of |
| | (1) the entire issued and outstanding |
| | share capital of V.B. and (2) certain |
| | intellectual property relating to the |
| | scientific projects of V.B. |
| | |
+---------------------------------------+---------------------------------------+
| "Company" or "Norwood" | Norwood Immunology Limited, a company |
| | incorporated in Australia (ABN 91 095 |
| | 271 186) |
| | |
+---------------------------------------+---------------------------------------+
| "Depository Interests" | depository interests issued on behalf |
| | of the Company representing a |
| | beneficial interest in certain |
| | Ordinary Shares |
| | |
+---------------------------------------+---------------------------------------+
| "DI Holder" | a registered holder of Depository |
| | Interests |
| | |
+---------------------------------------+---------------------------------------+
| "Disposal" | the disposal of Bestewil Holding B.V. |
| | (and its subsidiary V.B.) |
| | |
+---------------------------------------+---------------------------------------+
| "Extraordinary General Meeting" or | the extraordinary general meeting of |
| "EGM" | the Company convened for 09.00 a.m. 1 |
| | April 2009 at the offices of Minter |
| | Ellison, Level 23, South Rialto |
| | Tower, 525 Collins Street, Melbourne, |
| | Victoria Australia |
| | |
+---------------------------------------+---------------------------------------+
| "Form of Proxy" | the form of proxy for use at the EGM |
| | |
+---------------------------------------+---------------------------------------+
| "Form of DI Instruction" | the Form of DI Instruction to be |
| | completed by DI Holders for use at |
| | the EGM |
| | |
+---------------------------------------+---------------------------------------+
| "Group" | Norwood Immunology Ltd and its |
| | subsidiaries |
| | |
+---------------------------------------+---------------------------------------+
| "Mymetics" | Mymetics Corporation, a company with |
| | the registered address at 230 Park |
| | Avenue, New York, NY 10169 |
| | |
+---------------------------------------+---------------------------------------+
| "Ordinary Shares" | the ordinary shares in the capital of |
| | the Company |
| | |
+---------------------------------------+---------------------------------------+
| "Solvay" | Solvay Pharmaceuticals B.V. |
| | |
+---------------------------------------+---------------------------------------+
| "Shareholder" or "Member" | a holder of issued Ordinary Shares |
| | |
+---------------------------------------+---------------------------------------+
| "SPA" | the sale and purchase agreement |
| | entered into between (1) the Company |
| | and (2) Mymetics on 5 March 2009 in |
| | relation to the Disposal |
| | |
+---------------------------------------+---------------------------------------+
| "V.B." | Virosome Biologicals B.V. |
| | |
+---------------------------------------+---------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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