SynAct Pharma AB (“SynAct”) today announced that the Board of Directors has decided to propose a rights issue of approximately SEK 22.4 million to finance an expansion of a planned clinical phase IIa study for the candidate drug AP1189 and an extension of the preclinical pharmacology programme. This is in order to widen the potential area of use and therefore the commercial potential of the candidate drug. The company has written contracts for Subscription commitments of approx 9.1 MSEK. A summons to the Extraordinary General Meeting will be published shortly.
SynAct is developing the candidate drug AP1189 for the treatment of inflammatory diseases with a previous focus on psoriatic arthritis (PsA), a joint disease that affects approximately 30 percent of patients with psoriasis. The results from the first part of an ongoing Phase I study show that AP1189 has a good safety profile and is well tolerated by healthy subjects at single doses that exceed the doses expected to have a therapeutic effect. Pharmacokinetic data provides support for the substance to be dosed in the form of a tablet once a day. The concluding part of the Phase I study (multiple dosing) is ongoing and the final results are expected in the Second Quarter of 2018.
AP1189 is a “biased” agonist on Melanocortin type 1 and 3 receptors, and has been shown in preclinical studies both to slow down inflammation progression and to contribute to faster healing of the inflammation. Based on this unique mechanism of action and the positive results from the ongoing Phase I study so far, SynAct has identified an attractive opportunity to widen the potential area of use, and therefore the commercial potential, for Candidate drug.
The disease pathology and symptoms of psoriatic arthritis are consistent with the much more common disease, rheumatoid arthritis (RA). In 2015, the global market for medication for rheumatoid arthritis was USD19.5 billion, while the sales of drugs for the treatment of psoriatic arthritis amounted to USD4.53 billion (source Global Data PLC). The company is therefore revising its plans for the forthcoming phase II program by including both RA and PsA patients with active arthritis (joint inflammation), instead of initial intention to include only PsA patients with “relapses”, i.e. acute deterioration of their disease.
SynAct is currently preparing an application to the regulatory authorities to start the phase IIa study, which is expected to be submitted in the Second Quarter of 2018. The purpose of this study is to study safety, tolerability and efficacy of both biomarkers and clinical endpoints in patients with active arthritis, mainly rheumatoid arthritis. The company now intends to expand the study to investigate the efficacy of AP1189 in addition to Methotrexate (MTX), the current standard treatment for patients with newly diagnosed RA, who have not received satisfactory symptom relief using NSAIDS (non-steroidal anti-inflammatory drugs). The aim is to give doses of AP1189 in combination with MTX to achieve a faster reduction of disease activity and thus alleviate the disease symptoms. The phase IIa study, which is expected to last for approximately 12 months, is scheduled to commence in the Third Quarter of 2018, assuming the necessary approvals from the regulatory authorities. The modified development strategy leads to a significant increase in the number of patients available for this phase IIa study, which is expected to result in a shorter and more effective recruitment process.
The company also intends to continue the pharmacological program to evaluate the potential of AP1189 in additional indications where the melanocortin system is involved and where ACTH based drugs, which also operate via melanocortin receptors, are used as a treatment at present. At present. ACTH is used for hard-to-treat cases of rheumatologic diseases and the indications of systemic lupus (SLE), multiple sclerosis (MS) and nephrotic syndrome (NS). The current market for ACTH drugs in the United States amounts annually to approximately USD 1.25 billion (H. P Achtar Gel). The reason why the use of ACTH treatments is limited to difficult-to-treat cases is the occurrence of a number of adverse side effects which, based on current knowledge, are not expected to occur during treatment with AP1189, even though this drug candidate has the potential to produce the same efficacy of treatment.
Synact’s objective is to divest or license AP1189 based on the results of the planned phase IIa study. It is judged that the expansion of the preclinical and clinical development program described above will further improve the chances of a value-creating future transaction.
Thus, in order to expand the clinical and preclinical studies, SynAct intends to implement a rights issue of approximately SEK 22.4 million, and the Board of Directors has proposed a rights issue of not more than 2 257 718 shares, assuming approval at the Extraordinary General Meeting . The public will also be given the opportunity to subscribe to shares in the rights issue. A fully subscribed new share issue would raise approximately SEK 22.4 million for SynAct Pharma before issue costs, which together with current funds is estimated to be sufficient to finance the company’s operations until the end of 2019. SynAct Pharma has agreed subscription commitments of approximately SEK 9.1 million, in writing, in advance. SynAct’s Board of Directors and Management have committed to subscribe SEK1.1 million and have entered into a “lock-up” agreement with SynAct over a twelve-month period. Notice of the Extraordinary General Meeting will be published shortly.
SynAct’s CEO Jeppe Øvlesen Comments:
Our ongoing Phase I study with AP1189 has already provided positive and valuable information, and we can now see that in addition to treating patients with psoriatic arthritis, we also have an opportunity to address the much larger indication rheumatoid arthritis. In addition, we have identified additional opportunities in both inflammatory joint diseases and other indications where the drug ACTH, which is prone to side effects, has sales of USD 1.25 billion in the USA alone.
The Offer in brief
| Preferential rights and record date: | The final day of trading in SynAct Pharma’s shares, including the right to receive subscription rights, is 11 April 2018 and the first day excluding the right to receive subscription rights is 12 April 2018. The record date is 13th April 2018. One (1) subscription right can be redeemed for each existing share. Possession of eleven (11) subscription rights entitles the holder to subscribe to two (2) new shares. |
| Subscription period: | 19th April – 8th May 2018. |
| Subscription price: | SEK 9.90 per share. |
| Size of issue : | The offer comprises a maximum of 2,257,718 shares, equivalent to SEK 22 351,408. The public is also given the opportunity to subscribe for shares in the rights issue. |
| Payment: | Cash payment is due on 8 May 2018. |
| Number of shares before new issue: | 12, 417,449 shares. |
| Pre-money valuation: | Approximately SEK 123 million. |
| Trading in subscription rights: | Trading in subscription rights will take place on AktieTorget between 19th April 2018 and 4th May 2018. |
| Trading in BTA: | Trading in BTA (Betald Tecknad Aktie – Paid subscribed shares) will take place on Aktietorget from 19 April 2018 until the new share issue has been registered with the Swedish Companies Registration Office. This registration is estimated to take place at the end of May 2018. |
| Subscription commitments | The company has received subscription commitments totalling approximately SEK 9.1 million, totalling approximately 41 percent of the issue volume. |
| Marketplace: | SynAct’s shares are quoted on AktieTorget. |
Financial Advisor
Subsequently, Fondkommission is the financial advisor and issuing institution for SynAct in connection with the planned new share issue.
For any questions regarding the planned new share issue, please contact:
Sedermera Fondkommission
Telephone: 040-615 14 10
E-mail: [email protected]
For further information about SynAct Pharma AB, please contact:
Jeppe Øvlesen Thomas Jonassen
CEO, SynAct Pharma AB CSO, SynAct Pharma AB
Telephone: +45 28 44 75 67 Telephone: +45 40 15 66 69
E-mail: [email protected] E-mail: tj@synactpharma.com
This is information that SynAct Pharma AB is obliged to disclose under the EU market abuse regulation. The information was submitted by the above contact person for publication on 23 March 2018.
For further information about SynAct Pharma AB, please contact:
Jeppe Øvlesen Thomas Jonassen
CEO, SynAct Pharma AB CSO, SynAct Pharma AB
Telephone: +45 28 44 75 67 Telephone: +45 40 15 66 69
E-mail: [email protected] E-mail: tj@synactpharma.com